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Lawyers start ball rolling for victims of apartment collapse

THE law firm authorized by the government has started negotiations with banks about mortgage-payment obligations of the owners of apartments affected by the building collapse in the Lotus Riverside complex, a director with the company said yesterday.

Shanghai Zhongxia Xubo Law Firm, entrusted by the city government to offer legal services to owners hit by the collapse, had spoken to the Bank of Shanghai, the Bank of Communications, the Industrial and Commercial Bank of China and China Merchants Bank yesterday, the director said.

It had handed over the owners' suggestion of terminating or suspending the loans.

The banks were expected to respond quickly to the suggestions, perhaps as early as today, said the director, Zhang Pengfeng.

Owners of Building No. 7 want their loans terminated since they cannot move into the collapsed building, while stakeholders of the remaining 10 buildings in the complex hope to have their mortgage payments put on hold.

"The firm will try its best for the benefit of the owners," Zhang said.

Shi Xiaofeng, a buyer who paid more than 1.39 million yuan (US$203,389) for a 95-square-meter unit of Building No. 6, applied for a mortgage worth 500,000 yuan in May.

Soon after Shi signed the contract with the developer, he borrowed money from the Shanghai branch of the Bank of Communications.

Shi's repayments of more than 2,000 yuan per month begin this Friday.

"Since the developer has not yet offered us reasonable compensation, why should I pay back the loan while the safety of the building is still up in the air?" Shi said.

The Shanghai branch of the Bank of Communications, which wrote most of the home loans for the apartment project, said just after the collapse that it would charge default fees if home owners delayed their loan payments.

"If a buyer with a loan stops paying a bank, he or she may have credit trouble in the future," said a lawyer, surnamed Wen, of the Zhongxia Xubo Law Firm.

The firm will also take into consideration any worthwhile suggestions by the banks.

"The banks also have their difficulties and we should listen to their suggestions," Zhang said, adding that the firm would figure out a good solution for both parties.

The total amount of mortgages on the residential complex comes to more than 100 million yuan, according to a previous report from Xinhua news agency.

Some buyers sent a joint letter to Han Zheng, the city's mayor, when the collapse happened, demanding the Shanghai government ask banks to stop their mortgage-payment obligations, or offer a refund on their apartments.


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