China banks ordered to "properly handle" mortgage loans
May 01 2011
Source : The Asian Banking & Finance
The China Banking Regulatory Commission ordered banks to "properly handle" problems related to housing loans and protect the rights of customers while improving risk management.
"All banks must strictly implement the country's macro control policies over the housing market and local branches should strengthen their inspection of home loans," the CBRC said in a statement on its website.
The statement pointed out that having a third party sign a mortgage loan contract on behalf of another person is a serious offense. It prompted banks and financial institutions have to examine their own operations and investigate to find out who is responsible for such offenses.
The Chinese government has pledged to stop house price increases through a series of tightening measures. Earlier this year, the State Council, or China's Cabinet, raised minimum down payments for mortgages, in some cases to as high as 60 per cent for second-home buyers, and suspended purchases of third homes in some cities. The measures are meant to cool down the property market.