This is my first blog post in 2020. I would like to take this opportunity to wish you all good health and every success in the new year. I have once introduced in my blog the Land Registry (LR)’s “Property Alert” service which enables property owners to remain vigilant of their properties easily. However, do you know that the LR and the Hong Kong Monetary Authority (HKMA) have jointly launched an e-Alert Service for banks to help them enhance their credit risk management in mortgage lending and to safeguard the stability of the banking system in Hong Kong. Today, I have specially invited the Land Registrar, Ms CHEUNG Mei-chu, Doris, and the Head (Banking Supervision) (Credit Risk) of HKMA, Mr YUNG Wai-sun, Sunny, to explain the service details.

An effective and efficient mortgage detection tool

There have been cases where property owners take out second mortgage or obtain multiple mortgage loans on the same properties without seeking prior consent from the original mortgagee banks. Such unauthorised practices have increased the risks of banks in mortgage lending and may pose a threat to banking stability if left unchecked. Ms Doris CHEUNG said that the LR launched the e-Alert Service for banks in February 2017 to provide the banks with an effective and efficient mortgage detection tool. Whenever a second mortgage or further charge document in respect of a mortgaged property is lodged for registration with the LR, the original mortgagee bank of the property concerned will receive an electronic notification from the LR. The service enhances the banks’ risk management in mortgage lending and curbs potential unauthorised second mortgages or top-up mortgages.

Written consent from property owners

To ensure compliance with the requirements of the HKMA and relevance to the needs of the banking industry, the LR has set up a Task Force in the early stage of service initiative to involve the HKMA, the Hong Kong Association of Banks and the banking industry on the joint development of service strategies with a view to achieving a customer-oriented service. Besides, to protect the personal privacy of the customers, banks must obtain prior written consent from the relevant property owners before subscribing to the e-Alert Service. Property owners may also opt to receive the same electronic notifications relating to their properties free of charge. The service enables both the banks and property owners to have a quick grasp of the information at the same time, so that they can take appropriate follow-up actions when necessary.

Enhanced online application facilities

Early last year, the LR launched an e-Channel for the e-Alert Service, which provides greater security and convenience to the banks by acceptance of online submission of service applications for the e-Alert Service so as to enhance the service and increase the operational efficiency. Ms Doris CHEUNG said that the LR will continue to enhance online application facilities and add a set of user functions such as maintenance of account information, service order enquiry and acceptance of e-cheque payment to provide more convenience for the customers.

Subscription for over 95% of new mortgage loan applications

The e-Alert Service has been well received by the banks and property owners since it was launched. HKMA’s Head of Banking Supervision (Credit Risk) Mr Sunny YUNG said that owners of over 95% of new mortgaged properties gave consent to the banks for subscriptions to the service in 2018-19. He added that the banks must comply with the requirements under the Personal Data (Privacy) Ordinance and put in place effective measures to protect the personal data of customers when using the service. Upon detection of unauthorised second mortgage in the light of e-Alert notifications, the banks in general will notify their customers that they have breached the contractual terms of the mortgage agreement, and will take different measures according to the actual circumstances of the cases. Such measures include raising the mortgage rates, demanding partial repayment of the mortgage loans, or requiring additional collateral.

Silver Prize of the Departmental Service Enhancement Award

The e-Alert Service facilitates the HKMA in performing its supervisory role to strengthen the banks’ credit risks management in mortgage lending and hence safeguards the stability of the banking system in Hong Kong. It also enables the banks to manage the credit risks associated with mortgage lending more effectively, and assists property owners to detect mortgage fraud. Moreover, the service has generated a new source of income for the LR in support of continuous service improvement. As Ms Doris CHEUNG said, it is certainly a 4-win service initiative. For the benefits achieved, the e-Alert Service was honoured last month with the Silver Prize of the Departmental Service Enhancement Award (Small Department Category) of the Civil Service Outstanding Service Award Scheme 2019.

I would like to extend my gratitude to my colleagues in the LR for their dedication. I hope that they will strive for further improvement, continue to display professionalism, and adopt new ideas and technology to enhance their services and efficiency in responding to the needs of the society.