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Residential mortgage loans in negative equity June quarter 2008 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 decreased marginally to 936 cases2 at end-June 2008 from 953 cases in the previous quarter. Compared with the peak of about 106,000 cases at end-June 2003, the number has fallen by 99%. The aggregate value of RMLs in negative equity stood at HK$1.7 billion at end-June 2008.
The unsecured portion of these loans remained unchanged at HK$0.2 billion. The loan-to-value ratio of the RMLs in negative equity fell to 112% from 118% at end-March 2008. The three-month delinquency ratio3 of the RMLs in negative equity fell to 0.61% from 1.13% at end-March 2008 as the amount of delinquent RMLs in negative equity reduced.
For further enquiries, please contact: Thomas Chan, Senior Manager (Press), at 2878 1480 or Hing-fung Wong, Manager (Press), at 2878 1802
Hong Kong Monetary Authority 28 July 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.
3 RMLs in negative equity delinquent for more than three months as a percentage of total RMLs in negative equity.
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