A full set of model mortgage loan documents, which help shorten time and save transaction costs for the sale and purchase of mortgage portfolios and the issuance of mortgage-backed securities, was launched today.

Speaking at the launching ceremony this evening,

Hong Kong Mortgage Corporation deputy chairman Joseph Yam said the model documents are simpler and more user-friendly compared with traditional legal documents.

"These are important documents, and standardisation will bring significant benefits to homebuyers, mortgage lenders, and the secondary mortgage market," he said.

"We hope that with a full set of the model mortgage origination documents now available, those undecided mortgage lenders will feel confident enough to make a full commitment to adopting the model documents by following the example set by some of the larger institutions," he added.

14 major mortgage banks adopt the models

The first phase of model documents, comprising the standard model deeds, appeared in November 2001.

Since the launch, the documents have been adopted by 14 major mortgage banks, which together make up around 84% of the residential mortgage market. 

Joining more than 400 guests at the forum, Justice Barry Mortimer said the documents deserve special acclaim and universal acceptance.

"These are documents which most people will sign at some time during their lives...for the purchase of their home on mortgage. They are documents of the first importance and they fulfill the aims of those who have drafted them," he said.

Plain language boosts consumer understanding

Consumer Council chief executive Pamela Chan pointed out the use of plain language in legal documents will enhance information disclosure and consumer understanding.

Hong Kong Law Society vice-president Anson Kan said the model documents represent the best market practice and raise the industry's standard.

Further use of the documents will help promote a prosperous and stable property market which the Hong Kong Mortgage Corporation can use as a basic stepping stone to enhance our international financial standing, he added.

The full set of model documents is available for public review at www.hkmc.com.hk.