www.shaproperty.com: [RealEdge] TodayOnline Forum : Better off renting?

Monday, October 02, 2006

[RealEdge] TodayOnline Forum : Better off renting?

This story was printed from TODAYonline

Better off renting?

HDB's flat-owning policy needs rethink to benefit the lower-income

Monday ? October 2, 2006

Letter from Leong Sze Hian

I refer to the article "HDB reports $1.4b ops deficit" (Sept 30).

It reports "a deficit of $51 million under the Mortgage Financing Segment category, compared to a surplus of $17 million the previous year", mainly due to "doubtful mortgage loans" ? which HDB explained as outstanding long-term monthly mortgage payments owed by flat-buyers in arrears.

In the financial year ended March, the HDB gave financial assistance to 28,386 flat owners, a 26 per cent drop from the previous year. Why, then, did the deficit from "doubtful mortgage loans" rise to $51 million?

Relative to a higher-income family, the probability of a lower-income family running into financial difficulty during a typical 30-year mortgage is quite high.

When I was a volunteer doing financial counselling and mentoring for recipients of the Home Ownership Plus Education (Hope) scheme, among others, almost 100 per cent were unable to service their housing loans regularly. If they could turn the clock back, most would rather have rented a HDB flat for $26 a month upwards instead.

I suggest we rethink the policy of encouraging lower-income people to own their flats. That is, unless HDB subsidised loan flat-owners are accorded the same CPF protection as private property owners prior to September 2002 ? when the first charge on the property was to CPF, so that in the event of foreclosure, one's CPF plus accrued interest would be protected and returned to one's CPF account.

Copyright MediaCorp Press Ltd. All rights reserved.

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// posted by Shajahan @ 10:36 PM

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	This story was printed from TODAYonline


	Better off renting? HDB's flat-owning policy needs rethink to benefit the lower-income Monday ? October 2, 2006 Letter from Leong Sze Hian I refer to the article "HDB reports $1.4b ops deficit" (Sept 30). It reports "a deficit of $51 million under the Mortgage Financing Segment category, compared to a surplus of $17 million the previous year", mainly due to "doubtful mortgage loans" ? which HDB explained as outstanding long-term monthly mortgage payments owed by flat-buyers in arrears. In the financial year ended March, the HDB gave financial assistance to 28,386 flat owners, a 26 per cent drop from the previous year. Why, then, did the deficit from "doubtful mortgage loans" rise to $51 million? Relative to a higher-income family, the probability of a lower-income family running into financial difficulty during a typical 30-year mortgage is quite high. When I was a volunteer doing financial counselling and mentoring for recipients of the Home Ownership Plus Education (Hope) scheme, among others, almost 100 per cent were unable to service their housing loans regularly. If they could turn the clock back, most would rather have rented a HDB flat for $26 a month upwards instead. I suggest we rethink the policy of encouraging lower-income people to own their flats. That is, unless HDB subsidised loan flat-owners are accorded the same CPF protection as private property owners prior to September 2002 ? when the first charge on the property was to CPF, so that in the event of foreclosure, one's CPF plus accrued interest would be protected and returned to one's CPF account.

	Copyright MediaCorp Press Ltd. All rights reserved.

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Monday, October 02, 2006

[RealEdge] TodayOnline Forum : Better off renting?

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