ST : Fewer flat owners unable to pay up

29 Jan 2011,
Fewer flat owners unable to pay up

Figure has dropped by nearly 11,000 in two years
By K.C. Vijayan

NEARLY 11,000 fewer Housing Board flat owners are in mortgage arrears compared to two years ago, figures have revealed.

About 23,000 were behind with repayments at the end of last year, down from 33,700 in November 2008.

Six out of every 100 owners were in arrears as of last month, down from eight per 100 about two years earlier.

The Housing Board disclosed the figures when responding to the case of an 83-year-old woman who is having to sell her flat after she fell behind with her mortgage repayments.

Madam Elizabeth Hong, a retired nurse, bought the four-room resale flat in Marine Terrace jointly with her daughter Janet for $230,000 in September 1994.

The Housing Board gave her a housing loan of about $148,000 but she began to fall into arrears in July 1998.

In 2006, she turned up at the Housing Board Geylang Branch Office and informed its staff that her daughter had left the flat. Janet, 43, used to help pay the monthly $705 instalment from her CPF account.

It is understood that mother and daughter did not see eye to eye and the daughter has stayed away ever since.

As the arrears began to mount, the Housing Board served notice in January last year that it intended to re-acquire the flat.

Madam Hong, who had been assigned lawyer Pratap Kishan through the Legal Aid Bureau, sought a High Court order last month to have the flat sold and the proceeds divided equally between her and her daughter.

She needed a court order under the law because she could not locate her daughter, the flat's co-owner, and there was no way of knowing whether she would object to the sale.

However, Janet turned up late last year and notified through lawyer R. Shanmugam that she wished to have the flat sold.

Both their lawyers will go back to the High Court next month to get an order to sell based on mutually agreed terms.

The proceeds from the sale of the flat will help pay off the outstanding Housing Board mortgage loan and should leave Madam Hong enough to relocate to a new flat.

She told The Straits Times on Wednesday that she has not yet decided where to move to after the flat has been sold.

She has two grown-up sons who live with their families.

Looking sprightly and animated, the slim, medium-built white-haired woman said she had given her daughter a good education and was disappointed at what had happened.

'I am very miserable now. I will decide what to do after the flat is sold,' she said. 'I never thought this would happen.'

Madam Hong said her daughter left more than six years ago without telling her she was going, and had not returned since.

In court documents filed she said she had even hired a private investigator to track her down, but to no avail.

The Housing Board said on Wednesday that it had tried to help Madam Hong with various measures but she had not responded.

'We would like to highlight that Madam Hong had more than 10 years to work out her housing situation,' said a spokesman.

Owners are generally given ample time to resolve their loan instalment arrears, the spokesman added.

The Housing Board sends reminders, conducts house visits and works with the families to encourage them to take concrete steps to make the repayments.

Under the law, it can compulsorily acquire a flat if arrears remain unpaid for three months.

However, the spokesman made it clear that the Housing Board will do so only when all other efforts fail.

Even then it 'will assist in alternative accommodation if necessary. The majority of lessees will heed our advice in resolving their arrears situation before reaching the stage where compulsory acquisition is required'.

The spokesman said the Housing Board will help flat owners in financial difficulty, but they 'need to exercise personal responsibility to seek long-term solutions'.

vijayan@sph.com.sg


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SADDENED BY SALE

'I am very miserable now... I never thought this would happen.'

Madam Elizabeth Hong on selling her flat to repay her mortgage arrears



ENOUGH TIME GIVEN

'We would like to highlight that Madam Hong had more than 10 years to work out her housing situation.'

A Housing Board spokesman, saying she did not respond to offers of help


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Options for financially strapped owners



BUYING a home is a long-term commitment, so it is important to be prudent and keep within your means, said an HDB spokesman.

One common reason for flat owners falling into arrears is that they have lost their jobs.

'HDB will help flat owners in financial straits who are unable to cope with their home loans to transit to a long-term sustainable solution,' said the spokesman.

HDB has housing counsellors at all of its 20 branch offices who can help such flat owners find both short-term and long-term solutions.

Short-term measures:

· Owners can make smaller payments temporarily.

· Payments can be deferred for up to six months.

· Arrears can be paid in stages within a reasonable time.

Long-term measures:

· Getting other family members to help pay the loans, for example, by becoming joint flat owners.

· Giving owners another loan to buy a smaller flat.

· Offering owners interim rental housing at below market rates. Under the scheme, two families share a three-room flat to keep rents low.

· Public rental scheme for those with no other housing options.