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32,000 out of 405,000 HDB households in mortgage arrears of over three months

by Vincent Low

In Parliament on Monday (19 Feb), a question was asked with regard to the number of HDB households which have been in arrears of or have defaulted in their mortgage payments.

In its written reply, the National Development Ministry said that over the last three years, of a total of about 405,000 households with outstanding HDB loans, about 32,000 households (or 7.9%) were in mortgage arrears of three months or more.

Of these 32,000 households, almost half or 50% are in the 41-55 age group, based on the age of the oldest owner. Another 38% are above 55, and the rest are in the 21-40 age bracket.

At the end of last year, 57% of these households (about 18,200) were no longer in mortgage arrears of three months or more.

MND did not say how these households managed to get out of their dire situations but presumably, many would probably have been forced by HDB to sell or downgrade from their flats so as to pay for the mortgage arrears. Those who were too poor to afford any downgraded HDB flats would probably be assigned 1-room rental flats.

MND said that common reasons why households fall into mortgage arrears include a drop in the household income, prolonged unemployment or illnesses.

"To help households in mortgage arrears, HDB provides financial counselling and refers the household to agencies that can assist with employment, financial aid and social support. If the household’s financial problems are temporary, HDB can help by reducing or deferring their mortgage instalment payments to ease their cash flow," MND wrote.

"For owners in prolonged financial difficulty, HDB will also help them explore long-term solutions. For example, they may include working adult children as joint owners to help with the mortgage instalments, or right-size to a flat within their means."

It did not reveal the number of households which were "right-sized" by HDB to "a flat within their means".

Meanwhile, Finance Minister Heng Swee Keat has announced that Singaporeans will be given a one-time special "hongbao" of $100 to 300 later this year.

It's not known if the special "hongbao" would be enough to help those HDB households who are in mortgage arrears.