HSBC, StanChart to suspend new mortgages to two HK projects by Evergrande, broker says by Reuters

© Reuters. File Photo: March 26, 2018, Exterior of China Ever Grande Center in Hong Kong. Taken on March 26, 2018. REUTERS / Bobby Yip / File Photo

Hong Kong (Reuters)-HSBC and Standard chartered (LON :) has refused to offer new loans to real estate buyers in two unfinished Hong Kong housing projects developed by the Evergrande Group of China, three mortgage brokers said on Wednesday. Told.

One of the brokers told Reuters that the Bank of East Asia had taken similar steps.

Bank movements were revealed after a Chinese court frozen Evergrande’s $ 20 million bank deposit this week and Chinese city regulators temporarily suspended sales of the two projects.

The three brokers said the bank had stopped lending to two Hong Kong housing projects scheduled to be completed in August and October, but said the bank was still lending to the third completed Evergrande development. It was.

They added that more banks may follow.

HSBC declined to comment, but Standard Chartered did not respond to requests for comment. Bank of East Asia said late Wednesday that the approved application would not be affected and will continue to accept loan applications where funds will be handed over to buyers after the apartment is completed.

Evergrande said other banks are still approving mortgages for unplanned units. He said he expects the unnamed decision by the Hong Kong bank to have a minor impact by suspending lending. The development was on schedule.

From a banking perspective, “mortgages for pre-sale development are risky because they are unsecured loans of completed real estate,” said Ivy Wong, managing director of Centaline Mortgage Broker.

Mortgage brokers said that many applications for two unfinished projects had previously been approved, so only a small number of buyers were affected.

They also said future buyers may try to change their payment arrangements with Evergrande to make purchases after completion.

Eric Tso, senior vice president of Mreferral, said many rejected buyers initially sought to borrow directly from Evergrande, which offered up to 90% of their purchases on mortgages.

“But currently, Evergrande isn’t extending mortgages,” Tso said, adding that banks wouldn’t normally offer mortgages with a 90% loan-to-real estate value ratio.

Evergrande has not yet commented on whether it offers a mortgage.

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HSBC, StanChart to suspend new mortgages to two HK projects by Evergrande, broker says by Reuters

Source link HSBC, StanChart to suspend new mortgages to two HK projects by Evergrande, broker says by Reuters

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