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In a decision that spans three continents, London-based HSBC has announced that it will no longer originate mortgages for some Chinese nationals trying to buy luxury U.S. real estate.
According to a Reuters report, this new decision follows efforts by the Chinese government to control its economic problems, which have been aggravated by Chinese nationals shifting capital out of the country. Luxury U.S. real estate has been a popular investment among the Chinese–the National Association of Realtors (NAR) reported that Chinese buyers purchased $28.6 billion of U.S. property in 2015, up from $22 billion in 2014.
China's government is planning to create a new system to track foreign exchange businesses at banks and the foreign currency purchases of its citizens. While HSBC declined to identify which Chinese nationals would be prevented from getting mortgages for U.S. properties, the luxury homes news Web site Mansion Global stated the new policy is aimed at Chinese nationals holding temporary visitor “B” visas that have most of their income and assets based in China.
HSBC issued a statement defending its actions, citing its adherence to the laws of the nations where it conducts business.
"HSBC fully complies with all applicable regulations in the markets in which it operates and constantly reviews its policies to protect its customers and support the orderly and transparent operation of financial markets," said the bank.