Why can mortgages in the United States be cut off at will, but not in China? This is because the systems of the two countries are different. In the United States, individuals have limited liability, and banks and borrowers share the risk of house price fluctuations. In China, on the other hand, individuals bear unlimited liability, all risks are borne by individuals, and banks are risk-free.
It sounds a bit abstract, but with an example you will understand. Let's say you make a down payment of $600,000, take out a loan of $1.4 million, and buy a house for $2 million, but the house price drops to $1 million in the past two years. If you choose to cut off the supply, the bank can only take back your house. As for whether the final auction price of the house is 1 million or 800,000, whether the bank loses or earns, it has nothing to do with you. Your loss includes the down payment of $600,000 and the monthly payment made every month before. If in China, your house will be auctioned by a bank. If the auction price is 1 million, you will lose not only 600,000 for the down payment and the monthly payment before, but also 400,000 for the bank owed. This means that your car and deposits are owned by the bank. What if you don't have a car and a deposit? That's sorry, all your future salaries, except for basic living expenses, will be prioritized to pay off the bank. This means that you may have to work for a bank for the rest of your life. Rising house prices have made banks a lot of money, but as house prices fall, more and more people are choosing to prepay loans or cut off their loans. This will force banks to reform to make them more favorable to ordinary people, otherwise it would be unfair to leave ordinary people only to bear the risk of falling house prices. What do you think?
