HOUSING AND DEVELOPMENT BOARD FLATS (Deferment and loan restructuring of mortgage instalments)

Dr Amy Khor Lean Suan asked the Minister for National Development (a) what is the number of applications received by the Housing and Development Board for deferment and loan restructuring of the mortgage loan instalment payment since 2001 by size of flats; (b) how have the numbers changed over time; and (c) the number of such outstanding cases also by size of flats.

The Minister of State for National Development (Dr Vivian Balakrishnan) (for the Minister for National Development): Mr Speaker, Sir, HDB's existing financial assistance measures for mortgagors in financial hardship include: (i) conversion to a reduced repayment scheme, under which a mortgagor can pay 75% of his normal instalment for a period of five years, (ii) deferment of instalments for a period of 6 months, and (iii) extension of loan repayment period.

Between January 2001 and March 2002, HDB received 18,200 applications for assistance under these measures. Of these, only 14 were rejected because these households were not in genuine financial hardship. 3, 4 and 5-room mortgagors accounted for 29%, 41% and 29% respectively of the successful applications during this period.

14,200 of these new cases were assisted in 2001. This compares against 15,000 new cases in 1999, and 10,000 new cases in 2000.

As at 31st March 2002, 15,300 of the cases assisted since January 2001 remained active. The flat type distribution among these cases is similar to that of new cases assisted during this period, ie, with 3, 4 and 5-room mortgagors accounting for 28%, 42% and 30% respectively of these cases.

Dr Amy Khor Lean Suan (Hong Kah): It was reported in the Business Times yesterday that there were 19,400 mortgage loan deferment cases. I would like to ask the Minister of State if the 19,400 cases refer to the arrears and if some of the loan deferment cases are also included in the 19,400 cases.

The other question I would like to ask the Minister is whether there are many applications for extension of the deferment cases after the expiry of the initial six months allowed. And if so, how would such deferment be given or extended?

Dr Vivian Balakrishnan: Sir, the report carried in the Business Times yesterday referred to cases which were in arrears in excess of three months. These are quite distinct figures from the figures which I have given, which cover cases which have approached the Board for assistance.

The key point here is that there is actually no need to go into arrears. The take-home message is that if people were to approach the Housing and Development Board early enough when they anticipate that their financial circumstances have changed, there are more than adequate measures in place to assist these people.

The Member's next question was on people who still continue to experience financial hardship beyond the six months. There are measures which are in place. We can reschedule the loans. We can add more names to the co-owners of the flat and take any other measures which were not utilised earlier to assist these people as well.

Mr Ahmad Khalis Bin Abdul Ghani (Hong Kah): Sir, would the Minister of State kindly reconsider relaxing the rules regarding the requirement that a person who wants to resell his flat must own the flat for five years, in the case of a new flat, or three years, in the case of a resale flat, in order to downgrade, in the event that there is genuine hardship on the part of the owner?

Dr Vivian Balakrishnan: In cases of severe financial hardship, the HDB does, on a case-by-case basis, allow families in these circumstances to sell their flats before the minimum occupation period has expired.