PURCHASE OF PRIVATE RESIDENTIAL PROPERTY WITH CPF CONTRIBUTIONS (Particulars)

Mr Teo Chong Tee asked the Minister for Communications and Minister for Labour (a) how many applications have been received for the use of Central Provident Fund contributions to purchase private residential property as at 31st July, 1981, and how many of them have been approved: and (b) how many of the successful applicants are able to pay for their property in full.

Mr Ong Teng Cheong: Mr Deputy Speaker, Sir, as at 31st July 1981, the CPF Board received a total of 1,830 applications, of which 703 were for full redemption of housing loans. So far, 200 applications have been approved, all of which were for full redemption of housing loans.

Mr Teo Chong Tee (Changi): Sir, may I ask the Hon. Minister the following questions? First, with regard to applications which have been approved, why does the CPF Board insist on having first charge on the property and holding on to the title deeds? Secondly, in the case of a civil servant who utilizes his CPF savings to redeem his Government housing loan, why is there a conflict between the Ministry of Finance and the CPF Board on the question of who is to take first charge on the property when, in fact, the CPF Board is able to resolve this problem and reach an agreement with the private sector, namely, the banks and the finance companies which are to take second charge?

Mr Ong Teng Cheong: Mr Deputy Speaker, Sir, the keeping of the title deeds by the mortgagee or chargee is a legal practice. This is to prevent the mortgager from sub-mortgaging the property without the existing mortgagee's knowledge.

The hon. Member asked why is there a conflict between the Ministry of Finance and the CPF Board on the question of who is to take first charge where civil servants utilize their CPF savings to redeem their Govern- ment housing loans. I understand that the Ministry of Finance is checking with its legal advisers on its position as second mortgagee under the CPF residential properties scheme before it consents to the CPF Board having the first charge on the property. There is really no conflict. The banks and finance companies have already given their consent to the CPF Board having the first charge on the property. The CPF Board does not expect any problem in resolving this matter with the Ministry of Finance.