It's quite bizarre any jurisdiction would allow someone to buy housing there when they can't legally live in it.
It feels like selling the next generations future for cash now.
"Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
71–80 of 417 posts
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#72All sounds very plausible, but where are the effects of this? We should be seeing many people holding mortgages at HSBC not able to pay. Are there no public stats showing how many lack of payments being made to HSBC? Is HSBC going to hold on to these properties taking massive losses? For how long? It has definitely helped the run up of prices here. It will also help the collapse of prices as well, either that or the…
I think that's what a lot of people here are not realising (or perhaps they haven't read the article). In this case the main victim is HSBC if these loans were made to individuals who are speculating on foreign real estate without the income to cover the loan. This doesn't look like originate and distribute, i.e. HSBC shareholders will bear the losses.
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#73HSBC funneled $1B (that we know about) for cartels, it came out as 100% knowingly committed, and no one went to jail. Basically the government asked for their cut. Why wouldn't do they this again and again? They are above the law, they are the law.
"The government asked for their cut" actually means that for laundering that $881 million in cartel money - they were fined $1.9 billion and then had to pay an additional $665 million in other civil penalties. They wouldn't do it again and again because they don't earn $880 million when accepting $880 million in dirty money - remember that bank deposits are liabilities to the bank - they only earn money from interest…
Is that enough though?
It seems pretty clear that putting people who commit crimes in jail definitely reduces their chances of commuting crime at least while they're in jail.
White collar crime is the root of all evil in our society and we should be putting white collar criminals in jail.
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#74HSBC soon to be RBC. This is not very surprising, a lot of this also gets facilitated by the independent mortgage brokers who get ppl through the system with some 'creative coaching'.
Lol no. HSBC has always had a much worse reputation than RBC, or any other bank for that matter. HSBC and Standard Chartered are amongst the worst international offenders when it comes to fraud and money laundering.
[deleted]
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#75It's quite bizarre any jurisdiction would allow someone to buy housing there when they can't legally live in it.
Most governments would do anything for foreign direct investment. From many points of view, having foreign investors buy property without immigrating is a best case scenario for governments.
In the long run (30+ years from now)? Or just for the few years they are in office?
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#76I was an SDE2 at AWS and I got denied a mortgage on a small apartment in Vancouver. I was deemed too high risk.
Reading stuff like this is demoralizing.
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#77Earlier quoted context omitted.
A lot of it doesn’t even sound like money laundering, just fraud. You say you have a job paying you lots of money from China, verification is loose, you get the loans, and then try to make mortgage payments via Airbnb. The risk is mostly with the bank, and if it doesn’t blow up you make all the money.
Banks these days often don’t hold on to those mortgages though. They can repackage them as securities like MBS and sell them to entities like pension funds. This type of thing is exactly how the GFC started
Except that the losses are rarely passed on to investors. The issuer (the bank) typically retains first loss (that changed after the 2008 crisis). So it's typically more a tool to get cheap funding than selling mortgages.
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#78Earlier quoted context omitted.
Something drastic has to be done about the cost of housing if we're to leave a functional society to the next generation.
Blaming foreign investors for a housing crisis is a smokescreen. It's not the demand from investors that's the issue; it's the government's stifling regulations that choke new construction. The mess is because of state failure, not market failure. When sellers freely sell their homes to foreign buyers, they're making choices that benefit them. Why should we deny them that right? The real absurdity is ignoring the ele…
USA population has increased ~10% in the last 20 years. Why has that small increase in population caused a humongous lack of housing? It feels like something else is going on other than "we need to increase supply by 10% but can't"
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#79All sounds very plausible, but where are the effects of this? We should be seeing many people holding mortgages at HSBC not able to pay. Are there no public stats showing how many lack of payments being made to HSBC? Is HSBC going to hold on to these properties taking massive losses? For how long? It has definitely helped the run up of prices here. It will also help the collapse of prices as well, either that or the…
- "A rolling loan gathers no loss."
As long as real estate prices continue to rise, you won't see large scale missed payments because they will be able to sell the assets, refinance the loan, or even successfully rent it out.
We've seen this dynamic in 2008 and in the S&L crisis before. Bad loans drive the bubble, the expanding bubble hides the bad loans, but when the bubble stops, there is a massive large scale loan failure.
Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks
#80All sounds very plausible, but where are the effects of this? We should be seeing many people holding mortgages at HSBC not able to pay. Are there no public stats showing how many lack of payments being made to HSBC? Is HSBC going to hold on to these properties taking massive losses? For how long? It has definitely helped the run up of prices here. It will also help the collapse of prices as well, either that or the…
The article suggests this is money laundering. It would make sense to have fake borrowers with fake incomes as part of a layering operation.
Someone wants to get $large_sum out of China. They can't do this without raising lots of flags in both countries. So they set up an army of fake borrowers, have them take out fraudulent mortgages on real properties in Canada, pay down the mortgages, and sell the property to obtain clean money on the other end.
All the better if the property rises in value in the meantime due to enormous fraud.