Many places have blocked the illegal inflow of credit funds into the property market. Are banks “extracting loans” to deter speculators?

Illegal inflows of credit funds into real estate may have entered the stage of substantial penalties after a period of rigorous investigation. Recently, it was circulated on the Internet that a personal loan in Shanghai that violated the purpose of the loan was withdrawn early. In addition to Shanghai, under the pressure of policy supervision, in Beijing, Guangzhou and other places, once it is found that consumer loans or business loans are used to purchase houses, there is also the possibility of being deducted according to the loan contract.

Since the end of last year, housing loan policies have been tightened repeatedly. First, the central bank set "two red lines" for various banks' housing loans. Then, hotspot cities, mainly first-tier cities, frequently introduced housing credit management measures.

According to industry insiders, in the future, cities where house prices rise too fast will strengthen supervision of illegal capital inflows into the property market, and the "loan extraction" initiative will also have a deterrent effect on speculators.

People who have misappropriated credit funds for house purchases have been fined one after another

Recently, a "Personal Loan Early Recovery Notification Letter" from Shanghai, which was posted online, showed that because the lender failed to fulfill the contract, Article 4 of the loan contract related to the "purpose of the loan". The bank announced that the loan of nearly 3 million yuan had expired early and notified the lender that the principal and interest of the loan must be repaid in full before March 31.

Generally speaking, when a lender uses loan funds illegally, according to the contract, the bank has the right to withdraw the loan in advance (i.e., "extract the loan"). According to Pan Hao, a senior analyst at Shell Research Institute, the above-mentioned notification letter mainly involves the misappropriation of business loans to house purchases and the bank's recovery of the loans. This also shows that the previous housing loan inspection has entered the implementation stage.

It is reported that as early as January 29 this year, in order to prevent consumer loans, operating loans and other credit funds from being illegally used in the real estate field, Shanghai issued the "Notice on Further Strengthening the Management of Personal Housing Credit" 》, conduct a comprehensive self-examination of consumer loans, operating loans and personal housing loans issued since June 2020. If the borrower violates the contract, it will be punished in accordance with the contract.

It is worth noting that according to media reports, in order to strictly control the illegal flow of credit funds into the real estate sector, in addition to Shanghai, banks in many places will also borrow money according to contract requirements if they discover this situation during self-examination. People repay their loans early.

From the perspective of punishment, according to Pan Hao, previous policies did not involve loan recovery. As early as 2016, Shanghai issued a regulatory policy requiring down payment funds to be its own funds. The penalty method at that time was to add violators to the list of dishonest people. In the same year, Shenzhen also issued relevant requirements, focusing on cracking down on Internet financial companies, small loan companies and other financial institutions engaging in financial leverage financing businesses such as down payment loans, crowdfunding for home purchases, and bridge loans. From 2017 to 2020, local regulatory policies on housing loans were mainly implemented to crack down on the behavior of fraudulently obtaining loans through fraudulent transactions.

Previously, Zhang Bo, director of the branch of 58 Anjuke Real Estate Research Institute, suggested in an interview with a reporter from the Beijing News that home buyers should be cautious in using some informal loan methods, such as consumer loans and business loans to raise down payment funds. , because the current investigation and punishment efforts are very strong, and you may even face penalties in the future.

In addition to bank loan withdrawals, the Banking and Insurance Regulatory Bureau in various places has recently been issuing “fines”, mainly targeting banks that make illegal loans or fail to supervise the use of loans. For example, on March 8, the Taizhou Branch of the Bank of China was fined 890,000 yuan due to poor post-loan management and the misappropriation of credit funds for house purchases. The Nanhu Branch of the Shenyang Branch of the Agricultural Bank of China was given a warning for illegally issuing personal commercial housing loans.

Li Yujia, chief researcher of the Guangdong Provincial Housing Policy Research Center, said that judging from recent local developments, banking regulatory authorities in various regions are strengthening inspections of capital flows after operating loans. Including the authenticity of the transaction background, whether the entrusted payment process is reasonable, whether there are large cash withdrawals, whether the borrower and immediate family members have purchased houses in the past six months, etc.

All regions strictly control the flow of consumer loans and business loans into the property market

In fact, from the end of last year to the present, housing loan policies have been tightened repeatedly. First, the central bank set up "two rules" for various banks' housing loans. "Red Line" clearly limits the proportion of total mortgage loans.

Then, mortgage regulatory policies in hotspot cities, mainly first-tier cities, were launched one after another.

On January 30, the Beijing Banking and Insurance Regulatory Bureau announced that it requires all banks to conduct comprehensive self-examinations on the compliance of personal consumption loans and personal operating loans newly issued since the second half of 2020, and found that personal Banking institutions will be severely punished for problems such as illegal inflows of credit funds into real estate. On February 10, the Beijing Banking and Insurance Regulatory Bureau issued the "Notice on Strengthening the Management of Personal Operating Loans to Prevent the Illegal Flow of Credit Funds into the Real Estate Market", requiring strict implementation of pre-loan investigations and due diligence in post-loan management.

At the same time, in February this year, the Guangdong Banking and Insurance Regulatory Bureau issued a notice requiring serious investigation and punishment of illegal inflows of business loans and consumer loans into the real estate field. It mentioned strengthening big data screening and seriously investigating and punishing the illegal flow of business loans and consumer loans into the real estate sector to create a market shock.

In addition to first-tier cities, regulatory measures have also appeared in second-tier cities. On March 3, Hangzhou City clearly prohibited the issuance of personal business loans and consumer loans used for down payments for home purchases or repayment of down payment borrowing funds, strictly reviewed the authenticity of personal business loans and consumer loans, and strengthened post-loan fund management.

In this regard, Li Yujia believes that illegal business loans flowing into the property market last year were mainly in Shanghai, Shenzhen, and Guangzhou, and may expand to second-tier cities this year. Therefore, policies must be used to block the channels through which business loans may flow into the property market.

Li Yujia said that if the loopholes of business loans entering the property market are not plugged, according to the current property market situation, the scope and scale of illegal business loans flowing into the property market this year will be greater than last year. On the one hand, this is because the pressure on operating loans is relatively heavy. On the other hand, as the intensity of regulation of the property market increases, mortgage interest rates will rise, and the scissor gap between operating loan and mortgage interest rates will also expand.

According to the financial statistics report for February 2021 released by the central bank on March 10, RMB loans increased by 1.36 trillion yuan in February, the highest level in the same period in history. Among them, loans to the residential sector increased by 142.1 billion yuan in February, an increase of 555.4 billion yuan year-on-year; medium and long-term loans increased by 411.3 billion yuan, an increase of 374.2 billion yuan year-on-year. Industry insiders believe that the property market transactions in February remained hot, supporting the continued increase in medium- and long-term loans for residents.

Supervision of the inflow of "illegal funds" into the property market may be intensified

"This round of rising housing prices in Shanghai, Shenzhen and other places is closely related to the illegal entry of credit into real estate." Previously, Zhongyuan Zhang Dawei, chief real estate analyst, believes that since the beginning of this year, the focus of real estate regulation has also been on regulating credit, and the effect of regulation depends on how well this policy is implemented.

Li Yujia also believes that cracking down on business loans and illegal capital inflows into the real estate market will be the main task of real estate regulation this year, and will also affect whether the real estate market can be stabilized this year. At present, the operating situation of the national property market is similar to that in 2016, that is, it has spread from the first-tier cities of Shenzhen and Shanghai to Guangzhou, Beijing and hot second-tier cities. If the flow of operating loans is not controlled, it may fuel a new round of bubbles.

As for the real estate financial environment this year, Pan Hao analyzed that from the China Banking and Insurance Regulatory Commission’s mention that “the risk of real estate bubbles is still very high”, it can be seen that the monitoring of real estate finance will continue to be strengthened this year, especially the implementation of In terms of "illegal capital inflows into the property market", a more important position will be mentioned.

However, Li Yujia said that it is also difficult to regulate the flow of business loans into the property market in practice. With the amount and proportion of mortgage loans under control, banks have more incentive to issue business loans that are disguised as real estate mortgages and enter the property market to cushion the profit losses caused by the decline in mortgage loans.

Li Yujia believes that in the future, there will be more joint inspections by the China Banking and Insurance Regulatory Commission and the People's Bank of China, as well as post-loan inspections by the audit departments of commercial bank head offices. The China Banking and Insurance Regulatory Commission will also coordinate the cooperation between banks in fund tracking. That is, if funds are loaned from Bank A and later flow to Bank B, Bank B will also be required to cooperate with the inspection.

Pan Hao predicts that in the future, cities where house prices have risen too fast, especially big cities, will strengthen supervision of "illegal funds" flowing into the property market, and the "early loan recovery" measure will deter real estate speculators. effect.

“If funds are used illegally, there will be the possibility of loan withdrawals. Recently, various places have taken measures to withdraw loans from some illegal loans.” Li Yujia said.