What the stagnant property market will force servicers to do

Will there be any aggressive action?

According to Moody,s, the current property market is stagnant, and when a servicer needs to sell a piece of property that covers the defaulted loan amount, a discount is necessary to attract potential buyers.

This situation is credit negative to loans with high LTV ratios.

Here's more from Moody's:

Loans with low LTV ratios are less impacted as the equity can act as a buffer against even a deep discount.

The property transaction volume contracted significantly after the HKMA introduced additional stamp duty in an effort to cool down the overheated property market that had seen prices appreciated significantly – by 25% alone in 2012.