Hong Kong adopts new model for Mortgage Insurance Program

20:24, November 08, 2010      

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The Hong Kong Mortgage Corporation Limited (HKMC) Monday announced the introduction of the Risk-based Scoring Model (RBSM) as an enhancement to its Mortgage Insurance Program (MIP).

The RBSM will replace the existing Risk-based Pricing Scheme ( RBPS) and Loyalty Discount Scheme (LDS), which were launched in 2006. After a comprehensive review of the RBPS and LDS, the HKMC has developed the new model to offer a more sophisticated approach to assessing the risks associated with MIP applications.

The newly introduced model takes account of different risk attributes, such as the applicant's credit record and repayment capability, to assess whether the applicant is eligible for a premium discount, and the relevant level of premium discount.

In general, applications with lower assessed risk can enjoy a higher level of premium discount. The maximum discount rate under RBSM will be 50 percent, the same as the maximum aggregate discount rate available under the RBPS and the LDS.

The RBSM will apply to all MIP applications received by the HKMC on or after Nov. 9, 2010.

"Since its launch in 1999, the MIP has been well received by homebuyers and has helped over 80,000 families to achieve home ownership," said Executive Director of the HKMC Peter Pang, adding that by adopting the RBSM, more homebuyers are expected to be able to benefit from the new arrangement.

Source: Xinhua


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