Date
24 March 2017
The owner of a flat in Cheerful Garden in Siu Sai Wan went bankrupt last year after entering loan agreements that did not comply with regulations. Photo: parkinghk.com
The owner of a flat in Cheerful Garden in Siu Sai Wan went bankrupt last year after entering loan agreements that did not comply with regulations. Photo: parkinghk.com

More home foreclosure auctions predicted

A rise in sales of foreclosed homes in subsidized housing estates is likely, the Hong Kong Economic Journal reported Wednesday.

Some speculators illegally pledged their residential properties, without paying the land premium to the Housing Authority, for mortgages to fund their investments in stocks during the market rally earlier this year.

They may have to give up the flats if they sold their holdings at a loss during the subsequent crash.

Four subsidized homes have been put up for auction this month, compared with an average of one per month during the first half of this year.

Among those four properties, three are foreclosed homes, the newspaper said, citing its own research.

Land Registry records show that all the four units were pledged to financial companies in loan agreements, the report said.

One of them was even remortgaged five times in 2013 for a combined HK$4 million (US$520,000) in loans from three different financial firms.

Some of the loan agreements carry an annual interest rate of up to 36 percent, so the homeowner may have to pay as much as HK$36,000 a month in interest alone, the report said.

Ricacorp Mortgage Agency Ltd. managing director Wong Wing-yan said some homeowners remortgaged their properties to bet on the stock market during the rally in April, and that might result in more foreclosures amid the market slump.

[Chinese version中文版]

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