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The Consumer Council welcomes and supports the standardization and introduction of the Model Mortgage Deed and Model Guarantee Form

  • 2001.07.26

The Consumer Council welcomes and supports the standardization and introduction of the Model Mortgage Deed and Model Guarantee Form.

The Council notes the improvement in consumer protection safeguards incorporated into the model documents such as:

  • The use of plain and user-friendly language in these two most important documents, which will enable homebuyers to clearly understand their legal rights and obligations.
  • Provision of a Chinese version of the documents.
  • Specification of default interest rates in the mortgage deed.
  • The adoption of the provision of "reasonable" indemnity as opposed to the more conventional "full" indemnity provision. Most mortgage deeds provide that the mortgager is liable for "all costs and expenses" irrespective of whether or not they are reasonably incurred by the mortgage lenders.

The Consumer Council welcomed the opportunity of the Hong Kong Mortgage Corporation Limited (HKMC) in inviting its comments on the two model documents and will continue to work closely with the HKMC to protect consumer interests.

Mortgage lenders and homebuyers are urged to adopt these standardised documents in the use of mortgage services.

For viewing of the two Model Documents, consumers can access the HKMC through the Consumer Council website.

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