Residential mortgage loans in negative equity March quarter 2008
The Hong Kong Monetary Authority announced today the results of its latest survey on residential mortgage loans (RMLs) in negative equity1.
The number of RMLs in negative equity decreased by about 900 cases to about 1,000 cases2 with an aggregate value of HK$1.6 billion in the three months to end-March 2008. Compared with the peak of about 106,000 cases at end-June 2003, the number has fallen by 99%.
The estimated unsecured portion of these loans moved lower to HK$0.2 billion. The loan-to-value ratio of the RMLs in negative equity rose to 118% from 117% at end-December 2007. The three-month delinquency ratio3 of the RMLs in negative equity fell to 1.13% from 1.75% at end-December 2007 as both the balance and delinquent amount of RMLs in negative equity reduced.
For further enquiries, please contact:
Peggy Lo, Manager (Press), at 2878 1687 or
Hing-fung Wong, Manager (Press), at 2878 1802
Hong Kong Monetary Authority
28 April 2008
1 The mortgage portfolio of the surveyed authorized 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.
2 The figures derived from the survey relate only to RMLs provided by authorized 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 authorized institutions do not maintain records on the outstanding balances of the second mortgages.