The number of apartment owners of unfinished buildings in China who are suspending mortgage payments is increasing. To date, the number of collective payment refusal cases has risen to 235, and a large-scale protest has occurred for the first time.
On July 15, Taiwan’s Central News Agency reported that after a “debt loan storm,” thousands of property owners in Xi’an gathered at the Shaanxi Banking and Insurance Administration on July 14, requiring banks to be investigated for illegal lending behavior to developers.
A video posted online shows property owners held banners and papers to protest. They claimed “illegal lending.” A large number of police officers were also present at the scene.
During this protest, despite the coordination of the Director of the Public Security Bureau, the officials of the Banking and Insurance Administration of China hesitated for a moment before stepping out to negotiate with the representatives. According to Vision Times, many people shouted: “Don’t be afraid, have some courage, we won’t hit people!”
It is worth mentioning that the CCP media did not report the incident of the owners surrounding the Shaanxi Banking and Insurance Administration, and the mainland social networking sites could not find a word or phrase related to it.
According to the Central News Agency, Xi’an is one of the areas hardest hit by the surge of unfinished buildings. In March of this year, nearly 300 house buyers moved into unfinished buildings of a community in Xi’an, with no hope of completion. Their lives in the new, partially built houses without water, electricity, and elevators were extremely difficult.
Since then, more than 100 owners of Jinling apartments in Xi’an Hi-Tech Zone have also moved into buildings that have been left unfinished for nearly five years. After the developers cut off electricity and water, the owners had to build their own toilets.
At the end of June, all the owners of Evergrande Longting in Jingdezhen, Jiangxi Province took the lead in announcing collective notice of their refusal to pay their mortgage to banks, trying to pressure local authorities and builders to complete the project. As soon as they heard the news, many victims took the same decision.
The content indicates that the Longting project stopped construction entirely at the end of May 2021, and the project supervision budget is also finished. Due to the construction standstill of the project and unsuccessful protection of interests many times, the owners of Longting requested the project owner to resume construction by the end of October 2022, otherwise, they will not pay the mortgage as of November 2022.
To date, there have been 235 real estate projects whose homeowners declared non-payment. Many believe that this number will continue to increase sharply.
The report points out that this wave of payment suspension issued directly by owners shows that the bank used the money prepaid by owners to illegally make loans to the real estate developers, did not deposit the buyer’s home loan into the custodian account as prescribed and did not fulfill the obligation to enter the fund. Some property owners, including those in Xi’an, also singled out the local China Banking and Insurance Regulatory Commission for ignoring the banks’ violations and not punishing them.
China’s official media Securities Times published a front-page commentary on July 13 with the headline “Beware of the spread of the suspension of unfinished real estate supply,” saying that as more homebuyers have announced a stop on the mortgage payment, many construction projects are unable to be completed. If the problem is not solved, it will hurt the homeowners, housing companies and banks.
According to the Central News Agency, a 29-year-old female homeowner who was a victim in Wuhan, posted that stopping collective loan payments was the last measure. They can only hope that this will put pressure on the developers involved to get the house built.
Credit loss is extremely serious in China, she said: “You don’t need a legal expert to explain, anyone can understand the huge risk to each individual. You will not only be able to fly high, run a business, but this also affects your children. You’ll be stuck with it for the rest of your life…”