i just don't understand how our govt still has the conscience to
raise its ministers' gargantuan pay when about 60 households lose
their home every monthly. sigh....sigh.....
leongszehian.com
895 HDB flats repossessed since 2003?"
By Leong Sze Hian
I refer to the article 895 HDB flats repossessed since 2003
(TODAY, Feb 2
.
It states that seven per cent of those who took HDB mortgage loans
were in arrears of at least 3 months.
As at the end of last year, banks have completed the mortgagee sale
of 895 HDB flats financed with bank loans since the start of bank
origination in January 2003. In recent months, the rate is about 60
cases a month.
Seven per cent of the 89,000 HDB flats with bank loans means that
about 6,230 HDB flat owners have not been able to pay for more than
3 months. Some of these may become foreclosures.
As more Singaporeans have no choice but to take bank loans, because
they have used up the two HDB concessionery loans allowed by just
upgrading once by themselves or with their parents, more may lose
their flats.
If there is a shortfall between the foreclosure sale proceeds of
the flat and the housing loan outstanding, banks have sued such
flat-owners for bankruptcy.
Banks have repossessed 1,445 flats since HDB bank loans started in
January 2003, and have sold 895 of them. This means that 1.6 per
cent of HDB flats on bank loans have been foreclosed.
As I understand that there are about 800,000 HDB flat-owners, if
they had all been with bank loans, just imagine the amount of
misery in Singapore with about 12,800 flat-owners having been
foreclosed (1.6% foreclosure rate). If the average number of
members in a flat is four, it translates to about 51,200 people who
may be adversely affected. We should be concerned that every month,
about 60 families are losing their homes.
In countries like the United States, which is arguably the highest
credit-consuming country in the world, the delinquency rate is 2.11
per cent, the highest in four years, for real estate home loans
which are over 90 days post-due or in foreclosure.
Singapores current rate of over seven per cent (seven per cent in
arrears over three months plus 1.6 per cent foreclosure) may be
about three times that of the United Sates.
How do we compare with other countries, particularly our neighbours
? I think at the rate that we are going, we may chalk up another
top world ranking in this regard.
As to from 2002 to 2006, some 360 households voluntarily
surrendered their flats after defaulting on their mortgage loan
repayments, can the HDB please clarify what do they mean by
voluntarily surrendered? Are they implying that no one has ever
been forced to vacate a flat ? I am somewhat puzzled as to why
anyone would voluntarily give up the family home, all the CPF
life savings of the owners, and maybe continue be in debt to the
HDB for any shortfall between the market valuation and loan
outstanding ?
A key finding of a research paper by Associate Professor Ong Seow
Eng, Research Director of the Centre for Real Estate Studies at the
National Univesity of Singapore, is that protecting the CPF
utilised in a mortgage, reduces significantly the tendency of
borrowers to be delinquent on their mortgages. Why are HDB
concessionary loan mortgages not on a non-recourse basis, like
practically all residential mortgages in the United States ?
On non-recourse mortgages, the borrowers are not liable for any
shortfall between the repossessed flats market value and the
outstanding loan balance.
Perhaps the only salvation for the thousands who are in arrears
(HDBs annual report said that it provided financial assistance to
28,386 flat-owners in its last financial year), is for their flats
value to increase at a rate higher than the 2.6 per cent accruing
on their indebtedness, into the future.
How many more Singaporeans have to lose their homes and CPF, before
we continue to describe a 1.6% foreclosure rate as being not very
high?
