By Leong Sze Hian

I refer to the article “895 HDB flats repossessed since 2003” (TODAY, Feb 28).

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.

Singapore’s 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 flat’s market value and the outstanding loan balance.

Perhaps the only salvation for the thousands who are in arrears (HDB’s 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?

——————————

About the author:

Sze Hian has 5 degrees and 13 professional qualifications. A Wharton Fellow, alumnus of Harvard University and the United Nations University International Leadership Academy, he has served as Honorary Consul of Jamaica, President of the Society of Financial Service Professionals, Representative of the Inter-American Economic Council, Chairman of the Institute of Administrative Management, and founding Advisor to the Financial Planning Association of Indonesia. He has been invited to speak more than 100 times in over 15 countries on 5 continents, authored 3 books and quoted over 700 times in the media.

Sze Hian’s website is here.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
You May Also Like

二跨国企业推26周育婴假 网民忧假期过长恐失业

假期对于就业者而言非常重要,尤其是对就业夫妻而言,育婴假更是如此。跨国企业打破目前的局限,将造福我国就业者,推出26周的育婴假。 英国酒业公司帝亚吉欧(Diageo)将从7月1日开始,为“升职”为父母的男女员工们提供26周的育婴假。而目前,该公司在本地共有150名员工,他们所享有的产假和陪产假分别是16周和两周。 据《亚洲新闻台》报导指出,帝亚吉欧的新育婴假政策也将在北美洲、西班牙、泰国和澳大利亚等地区实行。 该公司大中华区和亚太区总裁Sam Fischer指出,推出有关的政策,是为了打造更具包容性和多样化的员工队伍,并且营造更好的就业环境。 彭博推出过渡育婴假 随着帝亚吉欧的宣布,彭博(Bloomberg)近期也将更新其福利政策,推出26周的育婴假。目前,该公司员工,无论男女都享有照顾小孩的18周育婴假。 彭博表示,26周的育婴假分别是让新父母享有24周的有薪假期后,还有10天的“过渡假期”,即允许员工在24周育婴假后,在接下来的10周内,可每周休息一天。 创始人彭博曾于5月15日发出的声明中指出,该公司是意识到每个家庭的不同,因此推出有关政策,以便可以反映出在全球各地男女同事们的需求。 随着有关新政策的推出,该公司的6名本地员工将从中收益。 其他外企维持保守政策 对于以上两家跨国公司的新政策,人力资源公司万宝盛华集团(ManpowerGroup)新加坡区经理Linda…

解决校园性暴力问题 叶品秀促设立法案条例

国会议员建议,制定可以被所有教育机构采用,以解决校园性暴力的国家法案或条例。 官委议员叶品秀在今天(27日)的预算案辩论中,提出去年发生的马芸事件,指相关机构在此事件上制定自己的政策和协议,是不足够的,而制定国家法案或条例,能够解决各校之间不同政策和协议的问题。 新加坡国立大学女学生马芸于2019年4月,在Instagram活动日记上分享了在宿舍沐浴时,遭到他人偷拍,并对肇事者没遭校方采取严厉行动对付感到沮丧。肇事者之后向马芸致函道歉,并被学校判处停学一个学期,被禁止进入校园和宿舍,必须接受心理辅导,也被警方发出有条件警告。 然而,该事件的处理方式引起了民众争议,也促使了该校纪律程序和处理类似案件能力遭到质疑。 叶品秀指出,学生的案件是否应该接受调查、如何调查、结果将会如何,以及受害者将会获得援助,都因学校不同而异。 对性暴力案件的处置应一视同仁 “事情不应该是这样的。暴力事件就是暴力事件,不应该因为学校不同而获得不同对待方式。” 她建议设立国家法规,以便规定校方的职责,保障对性骚扰保持零容忍立场,为受害者提供充分的援助和照顾,并制定调查和处理投诉的标准及原则。 她指出,2015年至2017学年期间,本地大学共接获了56起涉及学生性行为不端的投诉案件。 “面子问题”   曝光案件仅冰山一角 “基于性暴力也可能导致颜面受损的情况,相信还有更多类似案件没有被投报上来。”…