China real estate market

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炒房揭秘内幕(translation by Google translate below). Let me summarize because Google translate did not do a good job. The guy was in pawn business. He used little own money to buy a house (he borrowed the money from bank). When the one year loan is due, he was very worried because his money is stuck in his business. The bank loan officer tell him not worry, just sell his house to his wife for a higher price (let his wife get a larger loan to pay off his first loan), in the process the loan officer will get a cut.

This seems just like the zero down payment, ARM rate in the US housing market a few years ago. All the hope was based on the rise of housing price. If the housing price plummet, obviously the banks will be left to hold bags (in China the mortgages are not securitilized).

Here is text generated by Google translate:
First, buy a house do not fish out a little, how do you operate?
If the students — (this is a mis-translation by google)
You know, my pawn business entirely on the money begets money. The first buy a house, although I have the ability to pay off the entire paragraph, but I do not want the house so much cash was crushed to death. At that time, being popular “zero down payment”, so I did not spend a cent, loans 180,000 bought a house (loan period of one year).

The expiry of one year, we should also paying back the principal and interest of the. I do not know lucky? Or am I bad luck! At that time, my funds are a business occupied. For business, I not only not starting paying back the principal did not say, must also another new loans. Forced to, I approached the old relationship – the bank’s credit department manager ditch dollar. When I hem and haw in the “extension is also paying back the principal and another new loans” requirements that came out, did not expect, credit managers are secretive smile, very readily agreed. (the meaning lost in translation, basically the bank loan officer agreed to extend a loan if the guy pay him a bribe).

Credit Manager give me the idea is simple: Let my wife, at twice the price of the loan to buy my house, loan term is for one year.
“Twice as loans, that is twice the interest ah! You this is not changing the side of exploitation me?” I do not have to react.
“If then, you do not repay it?” The credit manager is very calm.
“Ah … …”
“The bank Shou Fang, there is no big deal! The key is to remove taxes and fees, I also got 170,000 virtue of a blank. No, this is 170,000 I can not get a man, I would give him at least 50000 points.” Rapidly I could react. So I credit manager, knowing smile … …

This is the first time I buy a house experience.

I later buy a house with similar experiences, that is: a firm does not dig a penny, all with the bank’s loans to buy a house; Then, if the investors met an unknown truth (said to be investors, in fact Shamao) to buy room, then sell him high. If you have not investors buy a house, then continued to increase their lending to house themselves, keep the money the banks use bank debt.

Also, I was pawn to open lines, the relationship with the bank average person can not compare. Common people buy a house, most choose 20-year mortgage, but I always buy a house loan for one year only, expired before of principal and interest. This operation, without pay for months. After the expiry of the loan, I just doing the “on paper” look to switch loans. In fact, I do not dig a penny.

Original Chinese below.


Another story, 温州炒房团 内幕, quote



Man, all this reminds me of Shan Zhang Tou (三张头). Essentially the banks are playing this game on real estate market. Eventually some naive people will get to pay. I am sure the smart pawn-shop guy will walk away from the house(s). Because he does not have any equity !!!
Shan Zhang Tou

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