The Hong Kong Monetary Authority announced today the results of its latest survey on residential mortgage loans (RMLs) in negative equity1.
The estimated number of RMLs in negative equity increased to 81 cases2 at end-March 2014 from 26 cases at end-December 2013. These cases were mainly related to staff housing loans of banks and housing loans under mortgage insurance programme, which have higher loan-to-value ratio.
The aggregate value of RMLs in negative equity increased to HK$345 million at end-March 2014 compared with HK$120 million at end-December 2013.
The unsecured portion of these loans increased to HK$8 million at end-March 2014 from HK$3 million at end-December 2013.
Since the first quarter of 2011, there have been no RMLs in negative equity with delinquencies of more than three months.
Hong Kong Monetary Authority
25 April 2014
1 The mortgage portfolio of the surveyed authorized institutions represents about 99% 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 the second mortgages were taken into account. 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.