China banking regulator tells banks to "properly handle" mortgage loans

10:01, March 11, 2011      

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The China Banking Regulatory Commission (CBRC) on Thursday ordered banks to "properly handle" problems related to housing loans and protect the rights of customers while improving risk management.

"All banks must strictly implement the country's macro control policies over the housing market and local branches should strengthen their inspection of home loans," the CBRC said in a statement on its website.

"Having a third party sign a mortgage loan contract on behalf of another person is a serious offense, and banks and financial institutions have to examine their own operations and investigate to find out who is responsible for such offenses," the statement said.

The CBRC statement followed the Chinese government's pledge to stop house price increases through a series of tightening measures such as setting differentiated terms for mortgage loans according to home buyers' eligibility and home purchase limits.

Earlier this year, the State Council, or China's Cabinet, raised minimum down payments for mortgages, in some cases to as high as 60 percent for second-home buyers, and suspended purchases of third homes in some cities. The measures are meant to cool down the property market.

Source: Xinhua
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