Housing debts mounting
17/10/2003 14:38
Local banks are spending more on defaulted housing loans owed by
individual home buyers, with the domestic big four banks registering every day
in Shanghai a combined increase of at least 100 borrowers failing to repay loans
on time, the Youth Post reported today.
Although it is a small proportion
compared with the large total of housing mortgage loans in the city, local banks
are suffering from the higher costs on defaulted loans.
Wu, a bank employee,
feels exhausted every day from calling clients demanding defaulted loans. "I
have to make such calls hundreds of times every month," Wu said.
"We have
tens of thousand property mortgage holders in our bank, and the number of
defaulted loan holders increases by more than 20 every day, a total of up to 500
a month," she added.
Few clients are not willing to, or cannot afford to
repay the loans, but several hundred clients don't repay the money unless they
are frequently reminded or urged by bank staff, said an industry
analyst.
Taking business trips, disputes among family members or with real
estate developers result in defaulted loans with banks, the analyst said.
The
Shanghai real estate market has opened to buyers from both home and abroad, so
local banks have to call clients outside the city to ask for the repayment on
defaulted loans, driving up their costs, the analyst said.
Clients should pay
more attention to their credit records, and those with defaulted loans for three
consecutive months or a total of six months will have their bad credit records
placed in their personal credit system for seven years, bringing them trouble
when applying for loans, credit cards, employment and even going abroad, the
analyst pointed out.
Wendy Zhang/ Shanghai Daily news
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