The Hong Kong Monetary Authority has recently made a rare move to inspect banks for two consecutive weeks.loanConcerned about the situation，The focus is particularly on companies that are not directly regulated by the HKMAfinance company，That is, the market is commonly known as "Cai Zi"。The core of regulatory concerns lies in：Banks may provide funds to finance companies，Finance companies then lend to the market with looser standards.，order has been tightenedmortgageRisks are re-amplified。
After multiple rounds of “hot tricks” were launched in the property market,，Bank residential mortgage business growth space under pressure，A new type of mortgage called “sub-mortgage” is gradually emerging on the market.Press again) or “sub-charge” financing model。This model is not a second click for owners in the traditional sense.，Instead, the financial company takes the customer'smortgageGive yourself property，Repackage and mortgage to banks or other institutions，To obtain additional funds to expand the business，The form is like "press in press"。
Press mode again：How a finance company remortgages a mortgaged property to a bank
When the owner mortgages the property to a finance company for a loan，Finance companies may bundle a basket of mortgage properties，Re-mortgage to bank loan。Different from "second press"，"Second mortgage" usually requires the owner to take the initiative to borrow money from a financial institution on the property that has already been mortgaged.；The "remortgage" is provided by the financial institution that has lent the first mortgage loan.，Re-hypothecate the relevant property interests to other institutions。The owner may not be directly involved，Maybe you don't know。
Land Registry information display，The word "sub-mortgage" appears in the registration records of some properties with first mortgages obtained by finance companies。Many senior bankers and frontline mortgage officers said that this arrangement is not common.。A person from a financial company who did not want to be named also said，Sub-mortgage or sub-charge are arrangements that have only recently appeared in the property market.。
Market data display，A more aggressive financial company in the property mortgage market，Including Hongye Credit and GIC Global Credit，have all been involved in this type of “re-click” arrangement；One of the funding providers behind the relevant mortgage financing is Bank of East Asia (23)。This type of structure allows banks to provide funding to finance companies，Indirect contact with mortgage assets。
Owner informed of risks：Further pressing may complicate the debt structure
Gloria Law, an independent villa owner in Sai Kung, purchased a villa unit with a mountain and sea front for more than NT$15 million in March this year to live in.，In the same month, he borrowed a mortgage of NT$12 million from GIC.。In accordance with the Hong Kong Monetary Authority’s mortgage guidelines，When banks undertake mortgages for this kind of multi-million-dollar mansions,，The maximum you can borrow is usually 50%；However, financial companies that are not directly subject to the Hong Kong Monetary Authority’s mortgage-to-value ratio guidelines，Higher percentage financing can be provided。Miss Luo actually borrowed 80% of the money。
Miss Luo said，I chose GIC mainly because of the convenient procedures.、Simple process，In addition, the company’s advertising is extensive，Make her think it's not a big problem，But the loan interest rate is 6% higher than that of the bank。Land Registry information display，In June this year, GIC transferred the property to a total of seven mortgaged properties held by different owners, including the luxury house Ji Wanfeng and Yuen Long Industrial Building.，Re-hypothecated to Bank of East Asia，i.e. forming a sub-mortgage arrangement。
After learning about the situation, Ms. Luo said she had no prior knowledge.，And reflected that he had always hoped to borrow 10 million yuan，But when we signed the contract, we discovered that the other party had prepared a loan of 12 million yuan.，and lobby it to increase the amount of borrowing。
GIC was established in 2008，The founder is Wang Yao, who is in his early thirties。Wang Yao once worked at JPMorgan Chase，Later, he borrowed 10 million yuan from relatives and friends to start GIC.。several years，GIC's total loan amount has exceeded 300 million yuan，and had planned to go public。
Default disposal requirements：Banks may gain stronger collateral control
To the uninformed owners，The key risk of re-pressing the structure is that：If the financial company defaults、Financial difficulties or cessation of operations，The bank that accepts the remortgage may exercise its rights in accordance with the terms of the contract。It is stated in the sub-mortgage contract signed between GIC and East Asia，If GIC defaults，BEA, as a lender, can require property owners to pay off their mortgages immediately，Or the relevant mortgages may be sold by East Asia。Bank holding interest in collateral，Considerable power of disposal can be obtained under certain circumstances。
Barrister Luk Wei-hsiung pointed out，Under a conventional mortgage, the owner usually has only one creditor；Depending on the structure, it may become two creditors simultaneously overriding the owner.。Bank when necessary，In principle, rights such as property confiscation can be exercised，Although the actual chance of occurrence is relatively small。
GIC founder Wang Yao said she “doesn’t deny it” in response to the sub-mortgage issue.，but no further reply。She also emphasized，Outsiders should not view all property mortgage financing as a negative，It is said that less than 5% of people use borrowed money to speculate in real estate，Many customers borrow money for business turnover；and believes that the government has not done enough in terms of financing support for small and medium-sized enterprises.，It is recommended that the Hong Kong Monetary Authority communicate with relevant financial companies。
Risks similar to those of subprime debt：Asset quality depends on the underlying borrower
Another financial company that engages in “remortgage” on a large scale includes Hongye Credit，He also remortgaged his first mortgage property to Bank of East Asia.。The credit history of some underlying debtors is more complicated，Some owners have had three or even four mortgages on their properties.。
in，The properties of an owner named Kwok on the lower floor of Yue Man Center in Kwun Tong were mortgaged to Shi Yu、Huilong、GIC、Kangye and other financial companies，Repeatedly mortgaged a unit up to ten times。final，Hongye re-mortgaged the relevant mortgage interests to East Asia。If the property market reverses and interest rates rise，What banks will hold will be a batch of higher-risk、Mortgage assets with complex underlying claim chains，In nature, it is easy to be compared by the market to "subordinated debt" risk.。
It is worth paying attention to，East Asia is in the remortgage contract with the financial company，The loan form is not clearly stated。If the bank collects collateral in the form of a commercial loan and lends funds to the finance company，It is possible to bypass the Hong Kong Monetary Authority’s specific requirements for residential property mortgages.。How to define the nature of a loan，It falls within the scope of the bank’s internal guidelines，Large actual operating space。
A finance company boss said，East Asia asked if it needed funds；How much it lends to customers，East Asia can provide loans at 80% of the total。For example, one floor is worth 10 million yuan，Finance company borrows 100% from customers，East Asia can provide 8 million yuan in financing to financial companies，Interest rates are only slightly higher than interbank interest rates。
Position of the HKMA：Discourage banks from providing funding to easy mortgage finance companies
The Hong Kong Monetary Authority pointed out in response to the sub-mortgage situation，If the bank provides funds to the finance company for mortgage，And these financial companies do not follow the guidance of the Hong Kong Monetary Authority when making loans.，May reduce the effectiveness of prudential supervision。The HKMA considers this approach unsatisfactory，Therefore, banks are discouraged from providing funds to such companies for mortgages.。
Bank of East Asia announced its interim results，Personal property mortgage business increased by 0.2% year-on-year；However, Hong Kong’s industrial and commercial financial lending increased by as much as 10%，The amount exceeds 100 billion yuan。Deputy CEO Li Minqiao said when responding to the mortgage business after the results meeting，Of course, the mortgage business has not grown；Asked whether he borrowed money from the finance company to build the building on time，He responded cautiously, "Yes."，But it is not a second mortgage。
East Asia later responded to the "re-press" situation by saying，Any type of organization，Banks will conduct a detailed assessment of their financial situation、Prospects etc.，and will strictly abide by the guidelines of the Hong Kong Monetary Authority。
Financial company threshold：Money lender license regulatory focus and capital requirements
The Hong Kong Monetary Authority has repeatedly tightened mortgage loan-to-value ratios for properties，Put pressure on bank mortgage business，Some customers turn to finance companies to borrow money，Drive the rapid increase in the number of financial companies。List of financial companies in the Registrar of Companies，quite diverse names，Including "Dieshui Development"、"Drunk Qionglou"、"Hong Kong City Loan Group" and "Jiaolong Group" etc.。
The registered addresses and operating status of some financial companies vary.。For example, the registered address of a company is 6th Floor, Tong House, Sham Shui Po.，But what we saw on site was that the tenement building only had five floors.，The sixth floor is a vacant rooftop；Another financial company has reported its address is located in a shop in Yuen Long shopping mall.，But the tables and chairs in the bunk are gathering dust。The addresses of the persons in charge of the relevant companies also vary greatly.，Available from the Peak to Fanling public housing estates。
The process of borrowing money from a finance company to buy a property is relatively simple.。Take GIC Global Credit as an example，If a client expresses that he or she will buy a one-story residential unit worth more than NT$5 million,，and calls the property a second floor、The bank will only lend up to 50%，But I hope to borrow 80% of it，The staff responded that it can be processed，Also stated that no proof of income is required，Just submit proof of address and provisional sale and purchase agreement，Can be issued in about one week，The interest is about 12 to 15%。
GIC has recently placed advertisements in major media，It advertises "carefully providing you with property loans" and "eight-minute approval hotline"，Emphasize that the preliminary approval results will be known within a few minutes.，Actively seize the mortgage market。Another financial company boasts that mainlanders can use Hong Kong properties as collateral even if they don’t have property in Hong Kong as collateral.，You can also borrow money。
in recent years，The number of money lender licenses is increasing year by year，from more than 700 two years ago，Increased to over a thousand。According to data from the Hong Kong Monetary Authority，There are four、Fifty financial companies have loan business relationships with banks；As of the end of March，The total loan amount of the finance company is 30 billion yuan，Of which, NT$8 billion belongs to mortgages。
Operating a money lending business in Hong Kong，The core requirement is to apply for a money lender’s license，and undergo a background check by the police.。After the license is issued，The focus of police supervision is mainly on whether financial companies are involved in loan sharking；For registered capital or capital adequacy ratio，no regulations。In other words，Even if you invest one yuan，In theory, it is also possible to establish and operate a financial company。Lack of continuous prudential supervision，This makes the relevant industries easily compared by the market to mainland shadow banking in terms of risk transmission.。If the property market drops sharply，Related risks may put pressure on Hong Kong’s financial system。
Mortgage Terminology Decoded：One click、Second press、Reclick and reclick
- First Mortgage：The owner pledges the property as collateral，Apply for a loan from the bank。Generally, property owners will only mortgage their properties once，first click，Mortgage ratio is usually 50% to 70% of the property’s market value。
- Second Mortgage：Also called additional pressing，That is, after the owner obtains a click，Apply for additional loans。Second mortgage loan interest rates are usually higher than first mortgage loans。
- Press again (Sub-Mortgage)：The lending institution transfers the customer's mortgaged property，Remortgage to other institutions，For example a bank，to obtain a loan。
- Transfer Mortgage：Transfer an existing loan from the original lending institution to another institution，Under normal circumstances, the remaining amount of the loan and the amortization period remain unchanged.。Remortgage is usually done because the new institution has lower interest rates，However, please note that early repayment may trigger penalty interest from the original lending institution.。
Money Lender License Application：Responsible department、process、Fees and renewals
Responsible department
Money lender licenses are handled by three departments。The Licensing Tribunal is responsible for ruling on license applications and issuing licenses；The Money Lenders Registry under the Companies Registry is responsible for applications for license renewal and endorsement on licenses，and maintain a register of debtors；The Police is responsible for examining applications for money lenders licenses、Renewal and endorsement application，and handling complaints。
Application procedure
Applicants must submit applications to the Money Lenders Registry and the Police。The Police Force will investigate the application，to decide whether there are grounds to object to the application，and will check the lease of the premises where the applicant operates money lending business、Documents such as deed of mutual covenant and financial status。If there is no objection，The application will be submitted to the Licensing Tribunal for issuance of the license。
Application fees and minimum capital requirements
Application and licensing fees are 8,800 and 1,910 respectively.。Minimum capital requirement is none。
License renewal
Money lender license is valid for 12 months。If you need to renew your license，Application can be made 3 months before the license expires，Usually takes 2 to 3 months。
Online financial company：Fund matching models and risks of collective investment plans
The pressure on banking business has also prompted some bank employees to turn to financial technology and online lending platforms。Long Peizhi, former head of Northeast Asia at Standard Chartered Bank，Established financial company WeLend，The goal is to raise funds online，Then perform matching and lend，All parties involved do not need to meet。
Long Peizhi said，What WeLend earns is the handling fee for facilitating transactions；Borrow funds from banks at low interest rates with general finance companies、The mode of earning interest differentials by lending to debtors at high interest rates is different.，Therefore, its interest rate can be relatively low。
but，If WeLend raises funds online，It may trigger Hong Kong’s Securities and Futures Ordinance。Barrister Luk Wei-hsiung pointed out，Any fund raising without the approval of the Securities Regulatory Commission may be illegal。Even if the funds are transferred to an overseas account，For example, setting up a BVI company to raise money and then repatriating it to Hong Kong，or “friend-to-friend” loan，As long as the investor has no day-to-day control over the management of the relevant property、Investment behavior is sustainable，And the purpose is to make a profit，May still constitute a collective investment scheme，Subject to CSRC approval。If no application is made，The project may face the risk of being stopped。
We are processing money lender licenses、Financial licenses and cross-border financial compliance projects，It is always recommended that enterprises start from the business model、Source of funds、client suitability、Advertising、loan documents、Preliminary review of anti-money laundering systems and regulatory boundaries。Money lending business does not just require a license to operate safely；Once asset mortgage is involved、Online matching、Capital pool、Cross-border funding arrangements or investment return commitments，Compliance requirements will significantly increase。
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