Behind the drop in HDB arrears

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Monday, 30 November 2009

Jufri Salim

A majority of Singaporeans live in HDB flats which are owned by the Government. These flats are leased on a 99-year period or they are rented out on a shorter-term basis.

The Straits Times recently reported (below) that the number of those in arrears of their monthly instalments has decreased from 33,670 last year to 30,770 this year, a drop of nearly 3,000 (see report below).

The report seems to make us believe that our nation's economy is improving and the folks are having it easier despite the on-going recession.

The HDB says that it gives alternatives such as deferring of payments, financial counseling and 'interim housing'. For deferment of arrears payment, HDB allows a 6-month window for home owners to settle their arrears without any late charges and penalty fees.

While it is true that any late payment charges and penalties during that six months will be waived, the monthly installments will increase with immediate effect thereafter. Therefore, you are paying more on monthly basis after the deferment period.

They will call you up dozens of times a week just to get confirmation from you that you are able to pay. In some cases, HDB officers will come knocking on the door imitating the likes of loansharks.

And if you are in financial difficulties, you are to come to any branch office for counseling where they will fix plans to settle your arrears. The most common plan is the suggestion to rent out a room or two.

They will also suggest housewives going to work and working part-time just to earn more to settle the mounting debts. If both parties are unable to come into any agreement, the ultimatum is: Pay up or ship out.

These threats are not uncommon. Repossession of the flat is a known weapon which many fear.

Many of those affected rent out the entire flat and stay outdoors. Many are also made homeless when their flats are repossessed. Could these be among the causes families living on the beaches and parks?

HDB also suggests selling your flat and downgrading to a smaller one, and use the profit to offset any outstanding arrears. In this way, you are not a burden to them anymore. You can also get a loan from banks.

But this doesn't end the problem because lessees now owe the bank which can also be very menacing when chasing arrears.

HDB reported a $2-billion deficit in its latest report before Government grants. Another report on the same day highlighted arrears owed to it.

This is misleading as HDB “buys” land from the Government at a reduced amount from market rates. In the end the Government still makes tons of money from HDB lessees. But to imply that the HDB deficits come from the arrears is not true.

While the PAP Government continues to build casinos and elite shopping malls at Marina Bay that cater to the rich, the poor and needy in Singapore are not at all a concern to it.

Jufri Salim is Vice-President of The Young Democrats.

HDB loan arrears down
Defaults stemmed by slew of measures, says HDB in annual report
Jessica Cheam
Straits Times
3 Nov 09

Despite the recession, the number of HDB home loan arrears fell from 33,670 in September last year to 30,770 during the same month this year.

The drop follows the Housing Board's introduction of a raft of measures at the outset of the financial crisis to aid owners at risk of defaulting on their home loans.

The measures, announced in February, included a mix of short- and long-term initiatives such as deferring payments, counselling and - as a last resort - compulsory acquisition.

The HDB also introduced the new concept of 'interim housing', intended for those who may need to urgently downgrade, but have bought a new flat that has yet to be completed.

Departing from its usual practice, the HDB started extending second concessionary loans to downgraders on a case-by-case basis.

Taken together, the measures led to a decline in the default rate from 7.9 per cent of 426,270 loans in September last year, to 7.5 per cent of 409,470 loans for the same month this year.

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Comments (7)

Mon 30 Nov 2009 8:04 AM | jmiahlee

excellent report from the SDP
keep speaking the truth

not only citizens,
there are also many more foreign people
with family in Singapore due to marriage ties, these are also very concern about
the deception and confusion caused by the PAP

we all need more truth
many thanks to the SDP

Mon 30 Nov 2009 10:15 AM | nobody - False claims on singapore is not a welfare state??

The “g’s” propagandas and state-media’s rhetoric over 4 solid decades that Singapore is not a welfare state have sunk root deeply into Singaporean’s mindsets, mind you, is having a decent cover over a citizen's head a welfare, sorry to speak: it is a basic "HUMAN RIGHTS" for a citizen to live in dignity where a place he has to defense and protect in time of crisis!!! While the “g” has accumulated tons of billions of foreign reserves and letting its “cronies” to have gigantic defective investments loses all over the world in just over a few months period, yet it deprived its citizen to have a decent standard of living!!! Where is the justice???? Never forget hdb is the only public housing organization/agency/""?company?"" in Singapore that is using taxpayer's money to fund the so-call "quality and ?affordable?" public housing development to its people to live in Singapore!!! SDP, please help to speak-up for the feeble Singaporeans that have been exploited by the autocratic g for so long, under "a-ruling-party" system!!!

Mon 30 Nov 2009 12:58 PM | BryanT - Jufri can write...better.

This is an ariticle that has very thin factual groundings and peppered with exagerations. Here are some observations:

a. "The report seems to make us believe that our nation's economy is improving and the folks are having it easier despite the on-going recession." - Firstly, the ST article was about HDB helping those with loan arrears. One wonders where Jufri drew such claims from. Perhaps Jufri was pre-emptively looking for good economic news that the authorities have so far been refraining from announcing.

b. "....the monthly installments will increase with immediate effect thereafter. Therefore, you are paying more on monthly basis after the deferment period." - Jufri did not attempt to account for his mathematics here. I'll do Jufri a favour and suggest that perhaps the subsequent montly installments are higher because they incorporate the missed payments to be paid over a period. [b]Perhaps Jufri refuses to see this possibility, or maybe he would rather have the missed payment waived as well.[/b] Many of us would think that that is the logical (and sympathetic) to do rather than "force" the owners to reimburse the missed payments in a lump sum.

c. "In some cases, HDB officers will come knocking on the door imitating the likes of loansharks." - It would interesting to hear from Jufri what behaviour exercised by HDB officers has irked him enough to say that they are akin to loansharks (or their runners). [b]Are we seeing hit-and-run HDB officers who wield paint cans and black markers?[/b]

d. "The most common plan is the suggestion to rent out a room or two....They will also suggest housewives going to work and working part-time just to earn more to settle the mounting debts." - Jufri objects to such useful suggestions made by HDB, but he offers no alternatives. [b]It simply reinforces the impression that the opposition usually opposes without proposing any viable courses of actions.[/b]

e. "Many of those affected rent out the entire flat and stay outdoors. Many are also made homeless when their flats are repossessed." - It is not prudent of Jufri make such allusions without providing any accompanying statistics and proof. Would it not be (equally) wrong to also accuse Jufri of making MANY exagerations in this article without saying where the tall-tales are?

Jufri should only attempt to write articles with proper substantiation of statements made. He (and SDP) can also attempt to offer some useful suggestion to people who are in financial difficulties and unable to pay for their installments or loans.

Tue 01 Dec 2009 4:29 PM | Seelan Palay

BryanT, feel free to write articles that you deem "better" and contribute it to this website. Or maybe you prefer making your article-like comments, most of which definitely lack "proper substantiation".

Tue 01 Dec 2009 10:52 PM | BryanT - Substantiated Irony

Let’s use this case as an example. The fallacies of Jufrie’s article were clearly listed in my earlier comment and “properly substantiated” to be so. Other readers may disagree with my views and are free to say so.

[b]But there is a tinge of irony when one accuses others of making “comments, most of which definitely lack "proper substantiation"”, without even attempting to substantiate the accusation itself.[/b]

As for the “invitation” to contribute articles to this website, the latter serves to promulgate SDP’s ideology that many of us (currently) disagree with. It’ll be a struggle (and unduly tax one’s logic as well) to write anything along those onerous lines. As such, I regret to have to decline the invitation. Perhaps Seelan can show the youngsters how to write a better qualified article.

Thu 03 Dec 2009 9:48 AM | Seelan Palay - Irony for BryanT to reflect upon

"But there is a tinge of irony when one accuses others of making “comments, most of which definitely lack "proper substantiation"”, without even attempting to substantiate the accusation itself."

Good time to reflect on yourself, no?

You say "many of us disagree with" but there's only you here BryanT. More claims made without substantiation. Oh wait, maybe you based it on what the Straits Times told you?

And no need to regret lah, because if you wrote an article without proper substantiation, then you might end up criticizing and replying to yourself in a downward spiral that might lead to a state of psychosis!

Sun 06 Dec 2009 3:32 AM | quantum

Points by ByranT

a) BryanT is acting blur.
b) Jufrie is talking about the effect, not the cause. The effect is the point, and BryanT misses it.
c) If loan-shark can use guns and handcuffs, do you think they will use paint cans? lol
d) Jufrie is stating the facts. Facts is what matters here.
e) Jufrie offers a theory to explain the observation. But BryanT does not have one.

It is 5-0 for Jufrie vs BryanT.