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Written by: Commentary Editing Room
2021-01-12 07:00
Last update date: 2021-01-12 07:00
A former employee of Huang Fung Law Firm, known as the "one brother" in the second-hand real estate mortgage market, was suspected of dishonestly embezzling client money. The Law Society of Hong Kong stepped in to take over the business of the firm on Christmas Eve last year. The law firm was immediately closed and bank accounts were frozen. As a result, expenses such as mortgage balances or deposits that had to be paid through the bank also suffered.
The victim of the incident held a press conference on Sunday (10th), saying that at least 79 people were affected, and the total amount of frozen funds exceeded 100 million. He also criticized the Hong Kong Law Society for its hasty takeover action, which put them at risk of being "subscribed" or bankrupt. .
The building transaction process needs to be handled by a lawyer. Buyers need to pay stamp duty, deposit, printing fee, etc. through the law firm. After the bank approves the mortgage payment, the money will also be directly delivered to the law firm to complete the transaction, and the funds will not be deposited Buyer account.
Therefore, when the Hong Kong Law Society takes over the Wong Fung Law Firm and its funds are frozen, the buyer will have to face pressure from the bank and the seller at the same time: Once the incident continues to delay, unless the seller is willing to accept the request for an extension of the transaction, the buyer may be the seller. "Fixed the booking", and in the case that the bank cannot receive the deed of the property, it may also recover the approved loan from the buyer, which may cause the owner to lose money.
Will the law firm be taken over or bankrupt?
At the press conference, someone asked the lawyers to promise them that they can return the frozen funds in full in the future, as well as put forward a treatment method and a specific timetable for the unfrozen funds.
At present, the Law Society of Hong Kong has reported the incident to different government departments and agencies, and its spokesperson also stated that other law firms are willing to assist the affected clients, and plans to hold another press conference within a few days to explain the incident, but the specific arrangements are still unclear. It is clear, especially whether the bank will open the Internet on this issue.
The purchase of real estate by citizens generally involves mortgage borrowing. To the government, millions of dollars may be a trivial matter, but for citizens, it may be their lifetime savings.
These prospective owners may be forced to re-borrow their relatives, friends or family members to complete the transaction as soon as possible in order to prevent the deposits they have paid from being "smashed" by the seller. In particular, some of the owners will be frozen together with their mortgage payments. Raising millions of dollars is no easy task.
A former employee of Huang Fung Law Firm, known as the "one brother" in the second-hand real estate mortgage market, was suspected of dishonest misappropriation of client funds. The Law Society of Hong Kong stepped in to take over the business of the firm on Christmas Eve last year. The law firm was immediately closed and bank accounts were frozen ( Profile picture / photo by Huang Shuhui)
Intervene to help the suffering system avoid similar incidents
In order to avoid the occurrence of "de-ordering" cases, the government needs to fight time quickly and provide special loans to the affected victims as soon as possible. First, let the victims continue to complete the transaction between the bank and the seller, and then the government will follow up after the law firm’s assets are unfrozen. Transitional arrangements.
This incident reflects a major risk in the prevailing trend of mortgage lending in the property market. Once the contractor's law firm suffers from asset freeze for some reason, it will affect the citizens as its clients.
In addition to providing short-term assistance to those affected by this incident, the government should also review the long-term response mechanism and study whether it is necessary to develop a follow-up mechanism for similar incidents in the future and intervene between the government and banks before and after freezing the assets of the law firm. Make coordination and even consider raising the order of claims for claims by prospective owners to ensure that they have a greater chance of getting their assets back smoothly.
Adjustment of stamp duty arrangements depends on public needs
The property market is still far from normalization, the mortgage ratio should not be relaxed
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