Hundreds phone banks for remortgage advice
Banks said they had hundreds of calls from homeowners seeking remortgage advice to work their way out of negative equity.
The response came after the Hong Kong Monetary Authority announced a guideline to relax the mortgage lending ceiling to 100 per cent of the value of properties whose value dropped to below the outstanding balance of the mortgage. Existing guidelines restrict banks from lending more than 70 per cent of the property value.
David Li Kwok-po, chairman of the Bank of East Asia, said more than 400 inquiries were received on remortgaging immediately after the relaxation was announced in the Policy Address. A spokeswoman for the bank said a further 400 inquiries came yesterday.
But the bank had yet to work out pricing packages for the potential clients, she said.
Hang Seng Bank, HSBC, and Hang Lung Bank said they also saw an increase in inquiries.
George Leung Siu-kay, HSBC's chief economist, said only a minority of remortgage requests would be accepted.
'The response certainly seems to be good. Obviously, there are lots of owners desperate for means to shed the heavy burden, even though the chances may not be very good,' Mr Leung said.
