PBOC OR­DERS TIGHTER MORT­GAGE CHECKS

Banks told to crack down on buy­ers try­ing to get around sec­ond-home pur­chase rules

New Straits Times - - Business -

BEIJING buy­ers un­changed. First-home buy­ers need only pay a min­i­mum of 35 per cent.

“Re­cently there have been more house­holds that use di­vorces to en­joy first-home mort­gage poli­cies,” said the PBoC op­er­a­tions of­fice.

“This has not only af­fected pol­icy ef­fec­tive­ness, but will also lead to prob­lems such as fi­nan­cial dis­putes and add to credit risks borne by com­mer­cial banks.”

Un­der the PBoC guide­lines for the cap­i­tal, ef­fec­tive im­me­di­ately, banks were also told to strictly check the source of down pay­ments by in­di­vid­u­als pur­chas­ing prop­erty, care­fully as­sess the abil­ity of bor­row­ers to re­pay loans, and im­prove on their res­i­den­tial prop­erty val­u­a­tions.

Mean­while, Beijing’s land au­thor­ity said yes­ter­day it had banned the reg­is­tra­tion of “ab­nor­mally-shaped” res­i­den­tial spa­ces, such as ex­tremely small rooms, pas­sage­ways or garages, ef­fec­tively block­ing the sale of such prop­er­ties.

Those spa­ces “don’t serve prac­ti­cal liv­ing func­tions”, said the Beijing Mu­nic­i­pal Bureau of Land and Re­sources in a post on its of­fi­cial Weibo ac­count, China’s equiv­a­lent of Twit­ter.

Lo­cal me­dia have re­ported cases of tiny res­i­den­tial spa­ces, here, be­ing sold at sky-high prices. Reuters

BLOOMBERG PIC

Peo­ple’s Bank of China has in­structed banks to strictly check the source of down pay­ments, care­fully as­sess the bor­row­ers abil­ity to re­pay loans, and im­prove on prop­erty val­u­a­tions.

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