Realize full coverage of geographical scope, financial institutions and real estate types
Regularly carry out “transfer with deposit” service
In order to promote the further recovery of the real estate market, reduce institutional transaction costs, and help economic and social development, China’s Ministry of Natural Resources and the China Banking and Insurance Regulatory Commission recently issued a joint document to promote the “transfer with mortgage” policy previously introduced in some places to the whole country.
On March 30, the above-mentioned two departments issued the “Notice on Collaboratively Improving Real Estate “Transfer with Escrow” to Facilitate People’s Benefits and Enterprise Services” (hereinafter referred to as the “Notice”), requiring all localities to build on the existing work and according to the local The implementation situation, mode and supporting measures of “transfer” should be carried out from point to area to do a good job of “transfer with custody”. Realize, and gradually expand to cross-banking financial institutions; promote the realization of residential real estate first, and gradually expand to industrial, commercial and other types of real estate. Realize the full coverage of geographical scope, financial institutions and real estate types, and carry out the “transfer with mortgage” service on a regular basis.
According to incomplete statistics, since August last year, Jinan, Nanjing, Suzhou, Shenzhen, Zhuhai, Fuzhou, Kunming, Xi’an, Jinhua, Wuxi and other cities, as well as Hainan Province, have all launched the policy of “transfer with mortgage” for second-hand housing to activate A downturn in the property market. “Transfer with mortgage” is mainly applicable to the case of transfer when there are outstanding mortgage loans in banking financial institutions and the mortgage loans are not overdue. The so-called “transfer with mortgage” means that when applying for the transfer registration of the mortgaged real estate, there is no need to return the old loan in advance or cancel the mortgage registration, and you can complete the procedures of transfer, re-mortgage, and issuance of new loans, so as to realize real estate registration and mortgage loans. Effective connection.
In the past two years, China’s real estate industry has experienced an inflection point. The decline in real estate terminal demand is coupled with the government’s strong crackdown on the real estate industry. Compared with the pre-epidemic level, many real estate related indicators are in a state of being cut in half. However, since last year, governments at all levels have continued to introduce measures to stabilize the property market and the smooth transition of the prevention and control of the new crown epidemic. This year’s real estate data has picked up across the board. According to the data released by the National Bureau of Statistics, from January to February 2023, the sales area of commercial housing nationwide decreased by 3.6% year-on-year, which was significantly narrowed compared with the 9.6% year-on-year decline in the same period last year and the 24.3% decline in the whole of last year. In addition, high-frequency indicators show that Sales continued to improve in March. Moreover, compared with the new housing market, the second-hand housing market recovered earlier. From January to February 2023, the sales area has exceeded the level of the same period last year, and continued to stabilize and recover in March. As the real estate “transfer with mortgage” policy is rolled out across the country, it is expected that China’s second-hand housing market will further pick up.
Zou Linhua, head of the housing big data project team of the Chinese Academy of Social Sciences Institute of Economic Strategy, told China News Weekly that “transfer with mortgage” can save transaction costs and reduce transaction risks. Previously, in the second-hand house transaction, the seller may need bridge funds in order to release the mortgage, which is very costly; or the seller asks the buyer to pay part of the house payment for the release of the mortgage, and the buyer has the risk of being cheated, and the money and the house will be empty; , It is also common for the seller to transfer the title before receiving the payment, which also poses a greater risk to the seller.
In short, the “transfer with mortgage” of second-hand housing eliminates the need for the buyer to bear the risk of advance capital, and the seller does not need to bear the risk of overdue bridge tolls. For banks, as the transaction volume of second-hand housing increases, their loan volume will also increase. Winning policy reform.
The “Notice” concludes that in the practice and exploration of local governments, three main modes of “transfer with mortgage” have been formed. Mode 1: Combination mode of old and new mortgage rights. Through the seamless connection between borrowing new loans and repaying old loans, “transfer with mortgage” is realized. Mode 2: Segmentation mode of old and new mortgage rights. By borrowing a new loan and repaying the old loan after the transfer, the “transfer with mortgage” is realized. Mode 3: Mortgage rights change mode. Realize “transfer with mortgage” through the change of mortgage right.
Cities that launched the “transfer with deposit” before the two departments issued the document generally met the regulatory requirements for capital accounts. In the new process of “transfer with deposit” launched by Jinan City, the introduction of notarized “deposit account” is an important part. Before the transaction is completed, all funds are under the supervision of this account to ensure the safety of funds. Once the transaction has a risk or an unexpected situation occurs between the two parties, the transaction fails, and the funds will be returned to the original route to avoid financial disputes. Shenzhen’s “transfer with custody” process is also based on “notarized deposit”.
The “Notice” issued this time also requires that all localities determine the appropriate handling mode in light of local conditions. In particular, buyers and sellers are involved in the business of different lenders. Encourage localities to actively introduce advance notice registration, through the advance notice registration system, to prevent “one house and two sales”, prevent risks such as vacant mortgage rights, protect the legitimate rights and interests of all parties, and ensure financial security.
Published in the 1087th issue of “China News Weekly” magazine on April 10, 2023
Magazine title: Real estate “transfer with mortgage” policy pushed to the whole country
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