After the real estate speculation frenzy, a 26-year-old young man stopped paying and left the market with a loss of millions -

Accident

Wang Haotian was once proud of buying three houses before he was 26 years old.

When he bought his first house, he had just graduated from college. At that time, he made a lot of money starting his business, and he bought a two-bedroom apartment of 80 square meters in Yanjiao with more than 1 million yuan. He graduated from a bachelor's degree at the age of 22 and was "high-spirited" - as soon as he graduated, he and several founding members opened a film and television production company in Beijing. And it's pretty well run.

This company mainly invests in micro-films and undertakes advertising videos. At its peak, Wang Haotian's company opened all the way from Beijing to Chengdu and Hangzhou, lavishly supporting full-process employees such as colorists, storyboard artists, and photographers.

As his business grew bigger and bigger, his vision for the future became broader and broader. He secretly set a small goal for the company - "to become a great company." He incubated and invested in micro-films, and after filming, sold them to "Aiyouteng" and made a lot of money. However, the long cycle from production to final platform sharing of micro-films always involves “unpredictable” risks. The decision to buy a house was made to hedge against this eventuality. In 2016, a year after he bought his first home in Yanjiao, the house price almost doubled.

In the next two years, he bought two more houses in Yanjiao, one of which was in the name of his sister. He firmly believed that houses were the most stable and reliable investment products. Moreover, with his strength at the time, he only needed a monthly payment of 20,000 yuan, but he was able to achieve rapid appreciation of assets, which was a cost-effective business in itself.

However, what caught him off guard was that the film and television industry suddenly changed. What he faced was not the failure of investment projects, but the evolution of the entire industry under the cold winter. The tax crisis in the film and television industry triggered industry consolidation. The survival of major film and television platforms was impacted by short video platforms. The original capital bubble was burst, and everyone became naked swimmers.

As an upstream supplier in the film and television industry chain, Wang Haotian’s feelings are even more obvious. In June 2021, he participated in a bidding for a commercial for a fast-moving consumer brand. In good times in previous years, the project budget would have started at least 1 million, but at that time the fast-moving brand only gave a budget of 400,000. Even so, many film and television production companies have engaged in fierce price wars and continued to lower prices, significantly shrinking profit margins.

Prior to this, the micro-film project they produced was impacted by Douyin and Kuaishou due to long-form video platforms, and "slowly they could no longer afford the money." Income from all aspects has shrunk sharply, and Wang Haotian's company's funds have been cut off - suppliers frequently come to demand payment, and the salaries of hundreds of employees cannot be paid on time.

Millions of debts piled up like snowflakes, and he had to tear down the east wall to repair the west wall and fill in the holes. At the worst time, several creditors took him to court, and his first house was auctioned off by the court to pay off the debts. Wang Haotian, who had no money left, could no longer afford to repay the nearly 20,000 yuan in mortgage payments. In the first month after he stopped paying the mortgage, he tried to borrow money or sell the house, but encountered obstacles. Six months after the payment was cut off, he could only watch as the two properties were taken away by the bank and awaited foreclosure.

Not only in Yanjiao, where Wang Haotian is located, but also in Zhengzhou in 2021, countless people with similar experiences to Wang Haotian are struggling on the verge of having their mortgage payments cut off. Li Chunyun, who runs a children's clothing wholesale business in Deji Plaza, a heavy rain not only scrapped her valuable goods, but also shattered her dream of owning an apartment and a home in Zhengzhou. Due to the epidemic and heavy rains, the store has been slow to recover, and she was forced to the edge of cutting off her supply.

Alibaba auction data shows that Zhengzhou currently has more than 50,000 properties being auctioned. This data is far ahead of the provincial capital cities in the country. In terms of the location of the platform, Henan has been marked red and has also been listed. Highlighted are Jiangsu, Zhejiang, Beijing and Guangdong.

"Collapse-like consequences"

Wang Haotian, who is in debt and has fought many similar lawsuits, is fully aware of all the consequences he will face if he breaches the loan contract and unilaterally cuts off the supply. But he was like a drowning man, unable to save himself.

Not long after he stopped paying the mortgage, Wang Haotian received a strange phone call. The other party claimed to be a loan expediter from the bank. The mortgage was overdue and Wang Haotian was asked to repay it as soon as possible.

Wang Haotian replied sincerely that he was trying to find a way to raise money and would pay it back as soon as he had money.

But he knew in his heart that he was at the end of his rope. When doing business, he exhausted the borrowing quotas of many small loan platforms and borrowed a lot of money from relatives and friends in order to work around funds. After the business failed, the funds could no longer flow normally. The monthly mortgage of 20,000 yuan is simply impossible to repay.

Wang Haotian once wanted to sell the house to repay the loan, but he couldn't sell it at all. Both of his houses are located in Yanjiao. If he wants to sell the house, he must first pay off the bank loan. Although he can use the buyer's money to repay it, the difference between the loan balance and the actual value of the house at that time is still hundreds of thousands. Looking for a bridge A loan means another capital cost, which Wang Haotian, who can't even squeeze out a monthly payment of 20,000, can't afford it. Moreover, the liquidity in Yanjiao is so poor that few people buy a house in full, and it is very difficult to sell quickly.

For Wang Haotian, that period was the most painful time in his life. I often toss and turn at night and feel listless during the day. A monthly loan collection call is a huge psychological torture.

What makes Wang Haotian even more unacceptable is that he has harmed his sister - due to purchase restrictions, Wang Haotian's second Yanjiao house is in his sister's name. After the payment was cut off, his sister was also forced to become the person subject to execution for breach of trust. Like him, he cannot take planes or high-speed trains, and Alipay and WeChat are also frozen.

Generally speaking, if the mortgage is overdue for just one month, the house will not end up being taken away by the bank or foreclosed on. If payment is suspended for one month, staff will usually remind you to repay, and you will also be fined for overdue interest. Three months later, you will receive an "Early Expiration Notice" announcing the early termination of the mortgage and requiring the return of all penalty interest and compound interest. If the mortgage is still overdue in the sixth month and the bank fails to negotiate, the bank will file a lawsuit and go through the legal process to auction the house and recover the cash.

During this period, if the owner can repay even one installment of the loan, both parties may negotiate.

Since the cessation of payment is a unilateral violation of the mortgage contract, all litigation costs and property preservation costs must be paid by the defaulter.

This is not a small amount of money for people who are in debt distress. At the end of 2021, a post from a Yanjiao homeowner circulated on the Internet - the house with a total price of 4.26 million was cut off, and the house was foreclosed after the judgment. He needs to bear the total interest, penalty interest, case acceptance fees, preservation fees, and attorney fees. It’s as high as more than 190,000 yuan.

The 190,000 fee includes 120,000 attorney fees. The homeowner in Yanjiao once questioned that the legal fees were too expensive. Regarding this, many lawyers interviewed by "Eye of the Storm" said that the standard for charging legal fees is mainly based on the lawyer's guidance standard price of 4% of the target amount of 1 million to 10 million. The above-mentioned There is no irregularity in the legal fees of 120,000, and since the suspension of supply is a unilateral breach of contract, all costs will naturally be borne by the defaulting party.

Owners whose properties have been foreclosed also face an important problem - auctioning their houses cannot solve their debt problems once and for all. In most cases, the property auction price still cannot cover the cost of repaying the bank, and the remaining balance still needs to be repaid.

After the above-mentioned Yanjiao homeowner auctioned his house, he found that he was just "paying" work for the bank. I paid a down payment of more than 2 million yuan 4 years ago, and then repaid a loan of more than 800,000 yuan. In the end, not only did I have nothing, but all the funds after selling the house were given to the bank. It was not enough, and I still had to pay 400,000 yuan.

This inversion phenomenon is mostly attributed to the sharp drop in housing prices in Yanjiao. The house Wang Haotian bought in Yanjiao in 2017 was 2.3 million. By 2021, the price had almost halved. The starting price is only 1.38 million yuan. Even so, it failed in the first round of auction, and was sold at a price of 1.01 million yuan in the second round of auction.

(Pictures from the Internet)

Beautiful picture

For many people, a house is a place to rest after working hard, and it is also A beautiful vision of the future when the real estate appreciates significantly.

When Wang Haotian bought the house in Yanjiao, he believed that the house was the most valuable asset. When I was 23 years old, I bought a house in Yanjiao with full payment. The house price continued to rise, almost doubling in one year.

Seeing the rapid increase in house prices, Wang Haotian learned the lesson and took out his spare money from business and bought a house through a bank loan. A year later, he took out another loan to buy a house in Yanjiao.

Looking back on his decision at the time, he felt a little reckless. He believed that he was not a risk-taker, but if he had some spare money, it would be difficult not to be incited by the house buying craze at that time.

In the first half of 2017, with the help of real estate speculators and intermediaries, housing prices in Yanjiao once reached their highest point. Wang Haotian described the hot house-buying scene at that time—homebuyers were “fearful that the house they were looking forward to would be snatched away by others” and called the intermediary every day.

When Wang Haotian decided to buy his third house in Yanjiao in 2017, the whole process took only one day.

Yanjiao is 30 kilometers east of the center of Beijing and belongs to Sanhe City, Hebei Province. It can be regarded as the most convenient and ideal place for the Beipiao people to buy houses. In 2016, Yanjiao's population surged from tens of thousands a decade ago to more than 1.2 million, becoming a "super large" town. Beisan County, including Yanjiao, is one of the main locations for the coordinated development of Beijing-Tianjin-Hebei and the super city circle.

Xu Wenwen, who graduated in 2015, is also a member of the army of home buyers in Beisan County. At the end of 2016, after working for less than a year, she was swept up in the house buying craze around her and decided to borrow money from her parents to buy a house. Because she was not qualified to buy a house in Beijing, she set her sights on Beisan County.

She has her own plan: Beijing, Tianjin and Hebei will develop along the same lines as the Yangtze River Delta and Pearl River Delta. Since housing prices in Shanghai’s back gardens can continue to rise, Dongguan and Huizhou near Shenzhen can also become “super first-tier” "City" light, why can't Beisan County?

With a down payment of 300,000 yuan raised by her parents, she finally settled on a 70-square-meter new house in Xianghe County. The house price is RMB 17,000, the total price is only RMB 1.2 million, and the monthly payment is less than RMB 5,000. This house is not for self-occupation, but as a long-term investment that will be sold at a later date and replaced with a larger house suitable for a family of three.

In March 2017, Langfang City began to "purchase restrictions". Non-local registered residents were restricted to purchase one house, and the down payment ratio for the purchase of the house was not less than 50%. In June 2017, Beisan County further upgraded Purchase restriction measures require non-local registered residents to pay social security for three years or provide tax certificates when purchasing a house locally.

The purchase restrictions came down hard, intending home buyers fled in all directions, and housing prices continued to fall. According to statistics from the Shell Research Institute, the price of second-hand housing in Yanjiao has been declining since 2018. The price dropped by 31% in 2018, and by 2021 the decline will almost be cut in half.

The price of Xu Wenwen’s house in Xianghe has dropped from around 17,000 when she bought it in 2017 to around 10,000 today. This means that she originally wanted to wait for the house to rise to replace a large apartment in Beijing. House aspirations dashed.

She did some calculations and found that the Xianghe house is currently worth about 800,000 yuan. Even if it is sold, it will only barely cover the remaining loan. "Calculated this way, it's equivalent to losing all the down payment and paying off nearly five years of loans in vain."

Although housing prices have fallen sharply, Xu Wenwen's mentality is calm, "Buying a house is like stock trading. When the stock price falls, it is acceptable at first. It is just a technical adjustment and it will rise sooner or later. But after a long time, you can only admit the loss and carry it."

Wang Haotian's two Yanjiao properties were cut off and auctioned. In the end, he lost nothing and still owed the bank 1.25 million. Because of this expensive lesson, he began to understand that there is no asset in the world that will increase in value forever.

Return to life

In the past few years, the fortunes of real estate speculators and the trend of housing prices in first-tier cities have given many people a wrong illusion - housing prices will always rise. The report of the 19th National Congress of the Communist Party of China proposed that "houses are for living in, not for speculation" was simplified into four words: "houses are for living in, not for speculation", which was mentioned repeatedly in the following years.

In mid-2021, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, once again proposed at the Lujiazui Forum, "Those who bet that house prices will never fall will eventually pay a heavy price."

Wang Haotian It paid a big price. The three houses he bought in Yanjiao have all been foreclosed on.

Afterwards, he reflected on the behavior of buying three houses in the past three years and said, "The house should return to its essence. If it is a real need, buy a house according to the real need. You should not blindly follow the trend. This may not trigger a larger debt problem." ”

There are many people who are more radical than Wang Haotian. "Economic Observer" once reported that a real estate speculator once bought 6 houses when prices were at a high point, with a monthly payment of more than 100,000 yuan. The main reason why Yanjiao real estate speculators cut off their supply is that they aimed to increase housing prices. In short-term arbitrage, the monthly payment exceeds the affordability of the family's income. When house prices fall and the arbitrage fails, the heavy monthly payment makes them miserable.

Looking beyond Yanjiao and looking at the whole country, even if they just need a house, many people’s inherent concept is that in order to beat inflation, they should fill up the loan limit within an affordable range and buy a car at once. In an always rising trend, such a decision can indeed bring the highest returns, but once the game of drumming and passing flowers stops, the full leverage will become a huge burden. Unemployment, illness, and industry downturn will all become unbearable burdens.

The leverage Xu Wenwen added to buy a house was not too high, which also made her feel a little lucky. Although the investment housing in Xianghe has not improved, her monthly payment is still within the affordable range, because Being young, the couple's salary and income are slowly increasing, and the money they borrowed from their parents has been paid off one after another in the past few years.

After experiencing a baptism of ups and downs in housing prices, many people have become more rational in their demand for home purchases. Xu Wenwen became cautious. She realized that real estate was no longer a guaranteed investment. If it was not an urgent need, she would no longer take the risk of investing in real estate.

After many people are troubled by mortgage loans, they begin to reflect on what the meaning of a house is to them. In addition to being a space for families to stay, does it tie itself down?

Wang Wensheng, who bought a house in Yanjiao, has a 3-year-old son, and his monthly mortgage and car loan expenses exceed 20,000 yuan. At first, my income could barely cover my expenses, but later my career changed and my income dropped sharply. In order to repay the debt, I opened 3 credit cards, and I ran out of money every month or so, and I became a veritable "debt".

He is under heavy pressure to repay loans. When he meets friends who are not well-off, he always advises them to rent a house if they can, rather than buying a house. "Quality of life is the most important thing."

After giving up the house directly, Wang Haotian was relieved and felt much more relaxed. For him, the most important thing right now is how to regroup, seek new opportunities, and make money to pay off debts.

There is still a hole of 1.25 million left after the house is foreclosed. Wang Haotian closed the branches in Chengdu and Hangzhou in early 2022 and continued to reduce the scale of the business. Before the Spring Festival, he calculated the assets he had this year and deducted all employee wages, supplier arrears and office rent. Basically, there was nothing left. However, fortunately, the debt did not continue to increase, which slightly alleviated the mental pressure.

He now thinks clearly that the current difficulties will eventually dissipate with the wind, and the most important thing is how to survive. He is developing a new business and will try to make a series of documentaries on artists. "Currently, variety shows, entertainment, and pastoral life tracks are already crowded with people, but there are relatively few video creators in these two areas. This is our opportunity."

Wang Haotian in the ups and downs of business activities , increasingly value long-term opportunities, "Now I just hope to support the company's people, have some stable projects, and then wait for opportunities." Wang Haotian has experienced making millions on a project, and also losing millions. , I can treat the house and money more calmly. "The world is a big dream, and there are several cool autumns in life." Wang Haotian, who has just entered his thirties, lamented. What is the most important thing? He had no conclusion, but whether it was him as a young man or today, the candidate answer was never a house.

(At the request of the interviewee, Wang Haotian, Xu Wenwen, Li Chunyun, Chai Wen, and Wang Wensheng are all pseudonyms in the article