Mortgage boycott in China creates push for extended real estate loans

Chinese regulators have urged banks to extend loans to qualified real estate projects and meet developers' financing needs where reasonable.

Sunday's remarks by the China Banking and Insurance Regulatory Commission (CBIRC) came after a number of home buyers threatened to stop making their mortgage payments for stalled property projects.

Investors have continued to dump Chinese banking stocks and developers' shares and bonds, even after the CBIRC vowed on Thursday to strengthen its coordination with other regulators to "guarantee the delivery of homes".

In an interview with the official China Banking and Insurance New on Sunday, the CBIRC reiterated that it will support local governments to promote home delivery.

It also expressed confidence that with concerted efforts, "all the difficulties and problems will be properly solved."

More specifically, the regulator urged banks to "shoulder social responsibility" and actively participate in the study of plans to fill the funding gap.

It also urged banks to strengthen communication with mortgage clients and support acquisitions of real estate projects to help stabilise the property market.

In addition, the watchdog said that financial risks in the northeastern province of Liaoning have been growing recently but were under control.

It also said the government will take measures to prevent risks at China's small lenders. 

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