The Hong Kong Mortgage Corporation Limited Mortgage Insurance Programme

The Hong Kong Mortgage Corporation Limited (HKMC) announced today (Thursday) that the new product which will provide insurance cover for equitable mortgage loans secured on residential properties under construction will be formally launched on Friday 27 April 2001. The Corporation has briefed the participating banks on the eligibility criteria and the processing procedures.

The new product will provide insurance cover for equitable mortgage loans with loan-to-value (LTV) ratios of up to 85%. Eligibility criteria are set out in the technical note at Annex A. Further expansion of the programme to cover loans with LTV ratios of up to 90% will be considered later in the light of the feedback from banks and the performance of the loans under the expanded programme.

Starting from 27 April, interested homebuyers may contact any of the banks listed in Annex B to apply for insurance cover for equitable mortgage loans with LTV ratio of up to 85%. Further information may also be obtained through the HKMC Hotline (2536-0136) or on the HKMC website (http://www.hkmc.com.hk).

The Hong Kong Mortgage Corporation Limited
26 April 2001

Annex A

MORTGAGE INSURANCE PROGRAMME
FOR EQUITABLE MORTGAGE LOANS

Technical Note

Framework

Under the Mortgage Insurance Programme (MIP) the HKMC provides mortgage insurance to Approved Sellers for an amount up to 20% of the value of the property, allowing the banks to lend up to a 90% loan-to-value (LTV) ratio without taking on additional risks. The Corporation has decided to expand the range of eligible products under the programme to include equitable mortgage loans secured on residential properties under construction, up to an LTV ratio of 85%.

Eligible Mortgage Originators

• All Approved Seller/Servicers of the HKMC.
• HKMC will reserve the right to terminate the arrangement with individual Approved Sellers if their mortgage underwriting standards are considered not satisfactory.

Eligibility Requirements

Every equitable mortgage loan applying for insurance under the Programme must meet the eligibility requirements comprising:

• Mortgage Conditions as set out in the Mortgage Insurance Operational Manual for Equitable Mortgages; and
• Core Eligibility Criteria set out below.

Eligibility Criteria for Equitable Mortgages Under the Mortgage Insurance Programme

Annex B

LIST OF PARTICIPATING BANKS

1. AIG Finance (Hong Kong) Limited
2. American Express Bank
3. Asia Commercial Bank
4. Bank of America (Asia)
5. Bank of China
6. The Bank of East Asia
7. Chekiang First Bank
8. The China State Bank
9. Chiyu Banking Corporation
10. Citibank
11. CITIC Ka Wah Bank
12. Dah Sing Bank
13. Dao Heng Bank
14. DBS Kwong On Bank
15. First Pacific Bank
16. Fortis Bank Asia HK
17. Hang Seng Bank
18. The Hongkong Chinese Bank
19. The Hongkong and Shanghai Banking Corporation
20. Hua Chiao Commercial Bank
21. Inchroy Credit Corporation Limited
22. Industrial and Commercial Bank of China (Asia)
23. International Bank of Asia
24. Kincheng Banking Corporation
25. The Kwangtung Provincial Bank
26. Liu Chong Hing Bank
27. Nanyang Commercial Bank
28. The National Commercial Bank
29. ORIX Asia Limited
30. Overseas Trust Bank
31. Po Sang Bank
32. Shanghai Commercial Bank
33. Sin Hua Bank
34. Standard Chartered Bank
35. United Chinese Bank
36. Wing Hang Bank
37. Wing Lung Bank
38. The Yien Yieh Commercial Bank