Piggyback mortgage loans in China

• So much for Beijing's vaunted 30% down payment requirement for mortgages (rising to 60% for subsequent purchases). Ping An Insurance (OTCPK:PNGAY) - one of the country's largest insurers - has begun financing down payments, allowing total out-of-pocket costs when purchasing a home to drop to as low at zero.
• The loan, says one eager 26-year old buyer short of funds, is interest-free for a year as long as there is sufficient assets backing it (she's using her parents' two properties as collateral). "It helps me fix a temporary funding shortage." What could go wrong?
• This sort of lending isn't new, but Ping An's entry makes it easily the most high-profile company to get involved. Some local governments have issued notices warning this sort of thing is in violation of Beijing's mandate on down payments.
• Ping An isn't worried. Armed with spreadsheets of historical data, the company says it can cap the bad loan rate at 2%.
• The China Real Estate ETF (TAO +0.3%).