OVER 30 companies were found illegally lending several billion yuan for down payments to homebuyers, a practice banned by the city’s authorities last month, the Shenzhen Evening News reported yesterday.

    Although authorities in Beijing, Shanghai, Tianjin and Shenzhen have halted illegal down-payment lending by financial agencies recently, some agencies are using other financial channels to lend, according to a Xinhua News Agency report.

    An industry analyst said over 30 companies in Shenzhen were found illegally lending to homebuyers, with the money involved amounting to 3 billion yuan (US$463.8 million).

    In Shanghai, some financial agencies helped homebuyers artificially raise the price of a property to secure bigger bank loans.

    Agencies then lend down payments to homebuyers so that they can apply for a loan. Homebuyers use the extra money to pay the down payment and other fees to the agency.

    Some agencies are using P2P loaning websites. P2P website users only need to provide ID cards and work and income certificates. They don’t need to specify how the loans will be used.

    These P2P investors mainly lend money to homeowners claiming they are investing in projects, according to the report.

    An estate salesperson in Tianjin said a Tianjin-based joint-equity bank could lend money to homebuyers via a fiduciary loan of up to 300,000 yuan without mortgage. A bank employee said clients could use loans for housing purchases and pay back the loans month by month.

    An industry analyst said illegal down-payment lending would stimulate the housing market and leave people with debt they couldn’t pay back.

    (Zhang Yang)