Probe loan collusion between property developers and banks

SOME HOMEBUYERS IN SHENZHEN, Guangdong province, complain the mortgage interest rates settled by the banks which the real estate developers earmark for their deals are markedly higher than those offered by other banks. Beijing Youth Daily comments:

After the marketization reform of the interest rate fixing mechanism, the banks are entitled to fix their mortgage interest rates. So homebuyers are justified in suspecting that the developers collude with their “partner banks” to force them to accept higher interest rates.

The banks are obliged to respond to the complaints of homebuyers. But they have remained mute and the developers simply pass the buck to the banks, claiming that it is the banks that set the interest rates.

The real estate sector has been a seller’s market for a long time, which means the homebuyers have almost no say in the bargaining with the developers and banks.

But despite this, the banking, land, housing, antitrust and market authorities have sat back ignoring the profiteering partnership.

None of these departments has taken the initiative to look into the homebuyers’ complaints to see if the banks and developers are breaking the law.

The marketization of interest rates does not mean the banks can seek illegal profits by forming monopoly agreements, which is against the antitrust law.

It is time that the authorities conducted an investigation to determine if the developers have influenced the banks’ interest rates, and whether it is legal for the developers to stipulate that homebuyers can only get loans from their “partner banks”.

If the authorities find the developers and the banks have formed an interest alliance for monopoly profits, the dispute should be settled through legal procedures.