Seeking advice on bankruptcy and hdb matters

[Foetid]

You could refinance/restructure the loan I suppose but if you are already in default it would either be very expensive (very high interest rates), require a lot of collateral, or the bank simply won't lend.

Best option for TS is to use another bank B to refinance the hdb from Bank A by buying over his mother's share of the hdb at market price or using an independent hdb valuer.

 

[Asphodeli]

Once bankrupt the court will decide how to pay back the money. The court will not let them touch ur HDB. What they are trying to get u to do is sell HDB to avoid bankrupt.

bankrupt = courts decide tell the bank go fly kite

if like that the best "solution" is for TS and his mum to both declare bankrupt

 

[Foetid]

Once bankrupt the court will decide how to pay back the money. The court will not let them touch ur HDB. What they are trying to get u to do is sell HDB to avoid bankrupt.

bankrupt = courts decide tell the bank go fly kite

u dont get it, its not the court touch hdb but rather its the bank loan is cancelled.

 

[Asphodeli]

this is not a case of hdb as collateral but rather bank cancelling the loan. This is only possible where the bank giving the property loan and the business loan is the same bank. Its indeed a loop hole, but still no hdb rules are broken.

dafuq sia this loophole never got patched by the law? jialats.

 

[fly1111]

if like that the best "solution" is for TS and his mum to both declare bankrupt

Did ts mention his contractually liable for the loan? If not there is no need for him to declare.

 

[Asphodeli]

Did ts mention his contractually liable for the loan? If not there is no need for him to declare.

No but the bank wants to withdraw/cancel the mortgage, as he is 80% share of the loan, therefore he is liable. If TS can't pay the full amount then he has to either sell or declare BK. In essence it's a "margin call"

 

[Foetid]

if like that the best "solution" is for TS and his mum to both declare bankrupt

then u can give your hdb or property for TS to live lor, u own it.

 

[fly1111]

No but the bank wants to withdraw/cancel the mortgage, as he is 80% share of the loan, therefore he is liable. If TS can't pay the full amount then he has to either sell or declare BK. In essence it's a "margin call"

Okay. Then he has to. No harm looking for mp or pro bono for help in this case…

 

[Destroybot]

I don't think they have the legal method to force sale your HDB, it is your mother bankruptcy not yours. HDB have records on serviced loan, worst case scenario you could check if you mother can sell her shares to you? Having a shelter over you is a basic needs, talk to your MP or the bank to negotiate a way through.

 

[Asphodeli]

then u can give your hdb or property for TS to live lor, u own it.

Seriously the bank does have the right to recall the mortgage, unless TS can pay up, or sell the flat. This is stated in the bank letter.

Therefore the most logical way to prevent this is to declare BK, have the OA look into this problem and possibly raise the loophole as a matter of the courts to look into the laws regarding this. Otherwise, like I mentioned before, ALL the banks will issue joint-mortgages to property buyers, and pray for one person to BK, so they can huat. Alternatively TS can try to refinance the loan with another bank, though I am doubtful it will be in time.

Approaching MP/probono would be the easiest and cheapest advice for the time being until TS decides what to do.

 

[DragonFire]

indeed the earlier edmwers said can ignore blah blah not serious, i dont think so. Essentially the bank has already terminated the loan, so meaning pay or move or sell on own accord. This is serious business. The bank did not use HDB as collateral as its not allowed, the bank simply terminate the loan and ask the other owner to sell it simply because its a joint tenancy, irrespective of he is the sole contribution to the hdb loan is not important to the courts or bank, it simply states his mum has the share of the hdb. This is no longer a hdb as collateral case but the bank using 1k a month salary as 800k loan guarantor, recognises his mum has a hdb asset. The bank just needs a few of such guarantors for the 800k loans.

Too bad, TS did not well plan b4 the bankruptcy, now leading into such a state is irresverible.

There is still some reprieve, TS will lose his cash portion and whatever 50% capital of the hdb flat. What he can do next is to either buy over his mother's share or to buy from the market new flat and sell off the current flat. It wont be a total loss but still a significant loss given the aggressive hdb appreciation across the years.

I agree. Now that the legal letter is actually posted for us to see with the demand conditions, I concur that the TS should definitely not ignore this.

The bank can't seize the flat directly but can do so indirectly by killing the TS's ability to pay for the flat and effectively forcing a mortgagee sale. In short they want that 50% share of the flat. Period.

 

[DragonFire]

Seriously the bank does have the right to recall the mortgage, unless TS can pay up, or sell the flat. This is stated in the bank letter.

Therefore the most logical way to prevent this is to declare BK, have the OA look into this problem and possibly raise the loophole as a matter of the courts to look into the laws regarding this. Otherwise, like I mentioned before, ALL the banks will issue joint-mortgages to property buyers, and pray for one person to BK, so they can huat. Alternatively TS can try to refinance the loan with another bank, though I am doubtful it will be in time.

Approaching MP/probono would be the easiest and cheapest advice for the time being until TS decides what to do.

You can't declare bankruptcy without the consent of your creditors..

 

[Asphodeli]

You can't declare bankruptcy without the consent of your creditors..

only need $15k to self-declare BK, no need to wait for creditors to issue SD

 

[Prismatic]

One thing need to be made clear is, is your mum really just a guarantor or did she take out the loan herself? Not sure about this but how can the bank allow your mum to be the guarantor for a 800K loan when under normal circumstances, she will not be eligible for the loan herself in the first place?

 

[Mecisteus]

Okay my 2 cents take on this.

1. TS has property loans and joint account with the Bank A. The property loan is joint tenancy and joint saving accounts 6 digits which is allows any party to withdraw. TS did not clarify how much is 6 digits, is it 500k, 600k, 800k cash in the saving account.
2. TS did not indicate the number of guarantors to the 800k loans, it should be possible for any number of the guarantor to the bank's satisfaction.
3. Putting aside whether the hdb can be a collateral to the business loan of 800k, which obviously no bank can allow to use hdb as collateral. Here, all i can say is Bank A definitely has the unilateral right to rescind or cancel a property loan, be it hdb or condo. Bank A dont really need to act in anyone's interest, it definitely can suka suka early terminate, in addition, all T&S conditions definitely has it that in bankruptcy or any other, the bank can early terminate.
4. Hence, what is very clear is that, Bank A has already (or going to) terminated the property loan even if TS did not default on the loan installment, the crux is that if bank A has already terminated loan, nobody, not even hdb, MAS, Member of parliament or govt can stop the bank from cancelling the loan nor force the bank reinstate back the bank loan. That's not important, whats important is that in a normal scenario, the borrower needs to refinance from another bank or if not TS must pay up the liability upon the notice period, hence the 400k.
5. What i do not know is this, is TS able to refinance from another bank?? Not very sure if i am right but i am afraid TS is probably unable to refinance because simply put that Bank A will not allow the refinancing as it has lien over the property due to TS's mother acting as the guarantor. Bank A has 50% share of the HDB and definitely has 100% ownership of the joint saving account. Bank A will not allow the other party to take over the HDB without the share of the HDB flat value owner by TS's mother. The law do not allow the bank A to sell the property without consent with all the owners agreement, however, the Bank A can force sell if TS do not pay the 400k. Hence, the question here is only whether can TS pay up the 400k, is he able to seek refinancing.
6. TS should seek HDB's counsel's help immediately or go to supreme courts or places where there is free lawyer service. (its 30mins for the free law advice)
7. Why is the bank A able to make HDB an implied collateral through such a structured package deal, i think it is a question for the law makers.

wah bro are you a lawyer ?

I find it unbelievable that with lets say $500k FD, the bank can allow a loan of $800k to a low income person. So HDB is like a hidden "collateral" ?

Assuming there are a few other guarantors, the bank is chasing for the sale of 1 HDB flat only ?

Lastly, do you think such loan package is within the MAS regulatory guidelines ? So far I don't think we had heard of such scenario.

 

[decodedlight]

Hmm...moral of the story.

Always finance your flat with HDB loan and not from commercial bank loan. This way you avoid the bank chut pattern forcing you to sell your flat to settle outstanding loan with them in event of termination. This is a loophole whereby OA can't touch.

 

[ZesiMuerte]

Very informative thread. Hope TS can update us.

I wonder, what if it's wife and husband name on the HDB flat, then one of the spouse is the guarantor declared bankrupt.

I never knew bank can just terminate the loan for HDB. TIL.

 

[Foetid]

wah bro are you a lawyer ?

I find it unbelievable that with lets say $500k FD, the bank can allow a loan of $800k to a low income person. So HDB is like a hidden "collateral" ?

Assuming there are a few other guarantors, the bank is chasing for the sale of 1 HDB flat only ?

Lastly, do you think such loan package is within the MAS regulatory guidelines ? So far I don't think we had heard of such scenario.

if a person a retired, no income but has property fully-paid, can always used as collateral. If the hdb is fully paid, then his mother cannot act as guarantor, hdb rule will overwrite the bank, so the bank wont lend. Essentially the credit analyst when looking at whether the bank can lend out the money is to assess all worst case scanario and look at the recoverable monies, all lose ends must be tie up. If one gurantor not enough, then need more gurantor to come in. if it becomes bad debt, the credit analyst n the approvor and his higher ups can get pok.

its abit like solving maths equations, all monies and loose ends must be tie up, if the loan was another bank then his mother wont qualify as gurantor.

 

[congster2]

Most practical for ts is to get some quick pro bono advice then decide whether to comply or hire a lawyer to fight the case. But you need all the documents. Your mom as guarantor would have a copy of the 800k loan document she signed.

 

[ZesiMuerte]

Question: If banks can just terminate the loan, then what is stopping bank from allowing someone, who already has an existing hdb bank loan with them, to be a guarantor for another loan? In a way, this set up the hdb to be used as a collateral by terminating the loan. Am I right to say that?