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the economic observer reported that recently banks' approach to handling mortgage defaults has begun to shift from traditional judicial auctions or debt transfers to a more flexible and diversified "cold treatment" approach.

what is "cold treatment"?

that is to say,even if you can't pay your mortgage, the bank may not immediately seize, sue or auction the property, but will negotiate with you first.

"the economy is bad right now, so it's okay for you to pay back the money later. or you can first return 25% of the monthly payment. then it won't be considered a breach of contract, and you can continue to live in the house. as long as you don't completely break the bank and stop paying the mortgage, we can still be good friends and everything can be discussed."

some people even said online that after they stopped paying their mortgages, the bank took the initiative to introduce them to jobs.

image source: internet, please delete if infringed

under pressure from various parties such as the mortgage default wave, banks have begun to make some concessions to give you some breathing space.

this is the first time in history that the bank, which was once high and mighty, has ever been so "humble".

in the past, those who should be sued would be sued, those who should be seized would be seized, and those who should be auctioned would be auctioned. after the house was auctioned, if it was still not enough, people would force you to continue paying back the money like a "debt collector".

the nature of banks determines that they will only ever add icing on the cake, don't expect them to provide timely assistance.

therefore, banks have always been described by businesses as "providing umbrellas when it's sunny and removing ladders when it rains", and this is even more so for ordinary residents.

why did the banks, which are used to being high and mighty, suddenly change their attitude?

in fact, banks also understand thatthe crisis may be about to burn to our feet.  

this may be beneficial to both parties, so that they will not end up breaking up and suffer greater losses.

let’s put it this way, this is a rational decision made by the bank after comprehensive consideration.

data from the national bureau of statistics:

in august, the sales prices of commercial housing in all cities among the 70 large and medium-sized cities decreased month-on-month, and the year-on-year decline generally widened slightly.

house prices are still falling!

the risk of supply disruption is still increasing.

according to wind data, in augustforeclosurethe number of listings was 81,901, the highest since august 2021, and exceeded 80,000 for the first time.

data source: wind

key,in august, the transaction volume of judicial auction houses was 19.919 billion yuan, lower than 21.548 billion yuan in july.the average transaction discount rate was 73.06%, the largest discount since september 2023.

the number of judicial auctions has reached a new high, but the transaction volume is declining and the transaction discounts are getting bigger and bigger.

the pressure on banks is increasing day by day.they had to lower their stance and no longer maintain a tough attitude towards homeowners who defaulted on their mortgage payments. instead, they adopted a roundabout and gentle "cold treatment" approach.

a simple and plain truth:

if you want to continue drinking milk, you must first ensure that the cows do not die!

if you want to keep harvesting leeks, you can’t just pull them out by the roots at once!

what is more noteworthy is that since the beginning of this year, early loan repayments have continued and the non-performing rate of bank housing mortgages has continued to rise.

at present, everyone is deleveraging, and people have to re-evaluate whether it is cost-effective to carry such a heavy mortgage.   

according to statistics from china business news, in the first half of

the total balance of personal housing loans of 42 listed banks decreased by 319.1 billion yuan from the beginning of the year, among which the six major state-owned banks decreased by a total of 311.9 billion yuan.

among the 42 listed banks, 21 disclosed the semi-annual non-performing rate of personal housing loans, of which 19 showed increases to varying degrees. the average non-performing rate of housing loans of the 21 banks increased by 0.1 percentage point.

image source: internet, please delete if infringed

as we all know, banks make money from the interest rate spread, and the bulk of it comes from mortgage loans.

but now, those who have no money have stopped paying their mortgages, and those who have money have repaid their loans in advance.

also, even if your bank wants to sue you now, the court will be reluctant to accept the case.

in the past, it would take no more than three months from the time the bank submitted an application to the time of compulsory execution. now, some cases have been submitted to the court for more than half a year, but have not yet been filed.

why?

first, the default on housing payments involves people's livelihood issues. if there are too many foreclosures in a city, it means that the number of homeless people in the city is increasing.

second, judicial auctions have greatly reduced local house transaction prices, causing the real estate market to further enter a downward spiral, dragging down the overall economy.

the government and regulators may also encourage or guide banks to adopt more tolerant policies to stabilize the real estate market, protect people's livelihood, and prevent systemic financial risks.

in a word, the pressure on banks is increasing and they have no choice but to give in. 

as the economy goes into a downturn, nearly 38 trillion yuan in mortgage loans have put a heavy burden on many families.

as debt increases, you reduce the volatility you can withstand in your life, and when debt reaches extremely high levels, you become extremely vulnerable and easily beaten.

this may be a dilemma faced by many families and individuals today.

home loans are an invisible anxiety for many people.

the life of a "house slave" does not allow for any mistakes. if you are not careful, you will fall into the abyss.

what’s even sadder is that the house may no longer belong to you, or even have never belonged to you, but the debt is still there.

in addition, the economic situation and employment environment have changed in recent years.homebuyers may find overnight that they can no longer pay their monthly mortgage payments.

some people may not realize that after a layoff, the day when their mortgage is paid off is no longer in sight.

ordinary people will not easily stop supplying money unless it is absolutely necessary.

when it comes to defaulting on mortgage payments, many people feel fear in their hearts.

defaulting on payments may mean losing the house, the down payment, high penalty interest, being blacklisted, and even affecting three generations...

you know, in china, many things will be misused and abused by certain people, such as credit reporting.

this is also why the author has been calling for lowering the interest rates on existing mortgage loans.

the reduction in interest rates on existing mortgage loans is related to the vital interests of the people and is what most ordinary people hope for and want.

it will greatly reduce the burden on many families and alleviate the problem of insufficient domestic demand.

the regulators are also willing to push for a downward adjustment. on the surface, the only ones who may not be happy about this are the banks.banks are the mainstay of the financial system.

plusnow china's banking industry's net interest margin has dropped to a new low of 1.54%, below the reasonable profitability level of 1.8%. 

in fact, if you look at the big picture and the long term, lowering the interest rates on existing mortgage loans may not necessarily be a bad thing for banks.

because, with regard to the high existing mortgage interest rates, ordinary people have already voted with their feet and started to "save themselves".a large number of people started to repay their loans in advance.

if everyone does not take out loans, and everyone is trying to pay off the loans in advance,everyone is saving money and not spending any money.

do you think, keep going?can banks afford it?

without the lips, the teeth will interdependent; without the skin, the hair will have no place to attach to.

if this continues, the release of consumption will be blocked, the economic cycle will be sluggish, and the virtuous cycle of the economy cannot be restarted, which will inevitably backfire on the financial system.

to put it bluntly, lowering mortgage interest rates is not only to save residents, real estate, and consumption, but also to save banks themselves.

during this special period, all market players are like grasshoppers on the same rope. only by sticking together for warmth can they survive the winter together.

finally, i once again call for:

lowering the interest rates on existing mortgage loans is the general trend and the will of the people.