CHINA: And you thought the only thing fake in China were the Gucci bags. Turns out, China, in an effort to stop speculation on housing, has tightened the terms of mortgage lending for second homes, forcing married couples with money to invest in second homes to divorce each other in order to obtain more favorable rates.
In mid-April, the State Council, or the Cabinet, ordered banks nationwide to raise the down payment for a family to buy a second home to a minimum 50 percent of the value from 40 percent, with a mortgage rate no less than 1.1 times the benchmark interest rate.
“After we get divorced, my wife will claim our house, so that I can apply for a mortgage as a first-home buyer since I don’t have a house under my name. And we will remarry after that,” Li said, adding that he got the idea from a real estate agency.
Chen Ping, a real estate agent in Changsha, has helped many couples apply for the preferential mortgage for the first-home buyer through a “fake divorce,” which was “legitimate and viable, just like reasonable tax avoidance.” [Thaindian.com]
Just a few days ago, we did this post on reasons couples get “fake divorces.” And you thought we were talking about Larry King! Now that the ruse has been outed, it’s left to be seen how the government will work to counteract those fraudulent broken matrimonies. Stay tuned.