Several domestic banks shied away from housing auction services to speed up the liquidation of their non-performing loan collateral provided by Taiwan Financial Asset Service Co (TFASC, 台灣金融資產服務公司) after the company began levying a 0.175 percent commission in April.
"TFASC received only 18 to-be-auctioned units from banks for the past two months after it began charging service fees," the company's executive vice president Louis Lu (陸俊雄) told the Taipei Times yesterday.
Before April when the company provided free-of-charge services, banks entrusted the company to deal with, on average, 100 houses per month, 45 percent of which have been successfully sold at the company's auctions according to Lu.
Lu added that the company needs income to offset operational costs and, therefore, has proposed to co-share the 0.7 percent commission that banks are required to pay courts for organizing housing auctions.
But before that proposal is approved by the legislature, the burden will be put on banks, which Lu said should be "reasonable."
"If liquidated, the charge on banks is only NT$17,500 per NT$10 million, which is smaller than a one-month interest payment," Lu said, urging banks to pay small and gain big while cleaning up impaired assets to facilitate the nation's financial reforms.
Two banks -- Hua Nan Commercial Bank (華南銀行) and Chang Hwa Bank (彰化銀行) -- contacted yesterday denied that they withdrew deals from the company because of the new charges.
"We're still evaluating the new measure," a manager at Hua Nan, who refused to be identified, said without elaborating.
Hsieh Chao-nan (謝昭男), executive vice president of Chang Hwa, said that the bank cares less about the new charges although he admitted that banks dislike to see new costs in dealing with non-performing collateral.
As a shareholder bank, Hsieh, instead, said that he supported the company's decision to charge services since the company -- a joint venture formed by 34 domestic banks last October to organize housing units on behalf of courts -- needs to maintain its management by generating income.
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