Chinese banks hold emergency meeting on mortgage crisis

Authorities in mainland China have reportedly held an emergency meeting to address concerns over growing customer refusal to make mortgage payments on stalled projects.

An emergency meeting was held this week with China’s Ministry of Housing and Urban-Rural Development, financial regulators and major banks to discuss apparent consumer mortgage boycotts, according to a ‘Bloomberg’ report citing unnamed sources. , given growing concerns that more homebuyers could follow suit.

The news agency did not provide an exact date when the talks took place and said authorities did not reach any conclusion on the matter at the meeting. The intention is for local authorities to flag affected projects more quickly, while some banks plan to toughen mortgage requirements in high-risk towns.

Nationwide boycotts

Meanwhile, China’s housing crisis appears to be worsening as a growing number of homebuyers refuse to pay mortgages on unfinished properties.

Homebuyers stopped making mortgage payments on at least 100 projects in more than 50 cities as of Wednesday, according to research firm China Real Estate Information Corp. That’s up from 58 projects on Tuesday and 28 projects on Monday, according to Jefferies, which estimates that a full default would result in 388 billion yuan ($58 billion) in non-performing loans, or 1% of the total mortgage balance of the China.

Several major lenders responded to concerns, with the Agricultural Bank of China announcing it had 660 million yuan in delinquent loans on unfinished projects while the Industrial Bank said 1.6 billion yuan in mortgages had been hit. , including 384 million yuan which later became overdue.