Still, to keep things in perspective there are a dozen millions affected in a country of 1.4 billion.
The level of corporate governance is appalling. Evergrande even venture into Auto. Evergrande Group - Group Business Banks indiscriminately released fund to developers resulting is in fund misuse. I have a nagging feeling that even the banks are in some sort of trouble. There is a parallel to the US sub-prime crisis i.e. no one ever goes to jail. No bone is broken.
Why oh why do you keep pulling up my name in shit I have no idea about? I have no clue what is going on in overseas real-estate markets! Oy!
It's ridiculous that the bank would actually lend the money collateralized on unfinished properties to people in the first place. As part of the mortgage approval process, there is a market appraisal done on the property. How did these unfinished pretty much non-existent properties get their market appraisal? What if people really default on their mortgages because they really cannot afford the payments anymore? The banks would have nothing to fall back on because these collaterals based on these unfinished properties are worth nothing; they are completely unsellable. This is very similar to the mortgage fraud that gave rise to the financial crisis in 2008 in the West. The only difference is the mortgage fraud that happened in the West happened with mortgages being approved for people with no/low income that should not otherwise qualify and in China, this mortgage fraud is due to mortgages approved for properties themselves that do not qualify. I hope China has not issued any derivative products based on these vulnerable mortgages because that was what really did the West in for the financial crisis in 2008.