Regulatory Alerts2009-10-30
Added · Updated
Best lending practices for residential mortgage loans
The Hong Kong Monetary Authority issued this circular to require Authorized Institutions to align their residential mortgage lending practices with standards observed during recent thematic examinations. The document mandates specific prudent methods for computing debt servicing ratios, including the inclusion of discounted rental income and comprehensive liability checks, while establishing strict protocols for verifying borrower income and conducting property valuations. Compliance will be monitored through off-site reviews and subsequent onsite examinations to ensure institutions address understated risks and maintain adequate documentation.
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