Due to the current Chinese government’s tighter regulation of cross-border capital flows, some banks currently providing loans to Chinese overseas to buy a home are tightening the business.
Interface News reporter recently from the United States real estate investment management company received a message at noon US time on January 21, the two governments reached a new anti-money-laundering agreement for holders of B1 / B2 visa overseas customers, HSBC From 0:00 on January 23 US time on January 23, stop the B1 / B2 visa holders of overseas customers to buy real estate loans in the United States.
HSBC’s specific policy is:
About the down payment deposit time. January 23: the first payment of funds need to be extended to foreign banks for 2 months; after January 23: the first payment of funds need to be outside banks in more than 2 months.
2. On the source of the down payment. January 23: approved down payment funds can be remitted from mainland China remittance deposit to overseas banks; after January 23: approval of down payment funds from third-country remittances deposited into foreign banks.
3. Proof of income. January 23: to accept the proof of income issued by mainland China; after January 23: only accept proof of income issued in addition to mainland China.
A domestic real estate business actively developing overseas business insiders also confirmed to the interface journalists said. “It is true that HSBC is one of our partner banks, and the recent regulatory requirements of banks have become more stringent and have had some impact on our sales. Some of the buildings that have already been contracted now can not be remitted and the loans can not be approved.”
Interface journalists in this consultation with the HSBC, the bank said no comment.
At present, SAFE explains its cross-border capital flow and says “there is no change in the requirement of strengthening the regulatory compliance of foreign exchange receipts and payments.” In the future, the SAFE will continue to monitor the implementation of the requirements of regulatory compliance through off-site and on-site inspections.
However, there is a gray area for cross-border capital outflows from home purchases and loans made by Chinese citizens in the United States or overseas. According to the requirements of the SAFE, “the amount of foreign exchange purchased by the domestic individual equivalent to 50,000 US dollars per person per year shall be facilitated.” For Chinese nationals who are not working in overseas regions, this amount can not satisfy at least 20% to 30% of the down payment of mortgages .
According to the news reporter of the interface, most Chinese citizens pay out the first payment of their home purchases overseas, except for the personal quota of 50,000 U.S. dollars. Most of the other quotas are remitted through “foreign borrowing” relatives and friends or even through underground banks.
According to a Reuters report, a HSBC spokesman in New York told them Wednesday that HSBC will no longer provide mortgages to some Chinese citizens in the United States. The new deal was implemented last week, about a month after the Chinese government suspended capital outflows to halt the foreign exchange business of Standard Chartered and DBS.
In addition, a spokesman for HSBC in Vancouver also told Reuters that Canadian subsidiaries have implemented similar policies and are actively evaluating these policies to analyze what changes need to be made in the local regulatory environment.
She also said HSBC is conservative on risk and favors customers who have established or are in deep relationship with Canada.
According to the National Association of Realtors, in 2015, homebuyers from China bought a total of $ 28.6 billion in the United States, up from $ 22 billion in 2014.
HSBC has repeatedly been fined for money laundering cases. In 2013, HSBC was fined $ 1.9 billion to become the single largest bank in the history of U.S. banks.