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The Hong Kong Monetary Authority announced today the results of its latest survey on residential mortgage loans (RMLs) in negative equity*.
The number of RMLs in negative equity decreased by about 400 cases to some 8,400 cases** with an aggregate value of $14 billion in the three months to the end of December, 2006. Compared with the peak of about 106,000 cases at the end of June, 2003, the number has fallen by 92%.
The estimated unsecured portion of these loans was barely changed at $2 billion. Correspondingly, the loan-to-value ratio of the negative equity RMLs remained unchanged at 113%. The three-month delinquency ratio*** of the negative equity RMLs rose to 1.26% from 1.21% at the end of September 2006 due to the contraction of the total portfolio of negative equity RMLs.
* The mortgage portfolio of the surveyed authorised institutions represents about 98% of the industry total. The survey results have been extrapolated to approximate the position of the banking sector as a whole.
** The figures derived from the survey relate only to RMLs provided by authorised institutions on the basis of first mortgages and which the reporting institution knows to be in negative equity (i.e. the outstanding loan amount with the reporting institution exceeds the current market value of the mortgaged property). Not included in these figures are some RMLs associated with co-financing schemes which would be in negative equity if taking into account the second mortgage. The extent to which such RMLs are in negative equity is not known because authorised institutions do not maintain records on the outstanding balances of the second mortgages.
*** Negative equity RMLs delinquent for more than three months as a percentage of total negative equity RMLs.
For further enquiries, please contact:
Sara Yip, Manager (Press), at 2878 8246 or
Ying-ying Cheng, Manager (Press), at 2878 1687
Ends/Monday, February 5, 2007
Issued at HKT 17:01
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