Wednesday, June 1, 2011

Spike in Foreign Purchases of Private Properties in Singapore

This is another unpublished letter to ST Forum sent on 29 May 2011.

Hi

Please refer to the recent reports and commentaries regarding the spike of foreign buying of local private properties. I would like to seek clarification from MAS and the lending institutions how the loans of such purchases are granted. What guidelines are used in allowing such purchases. How do lending institutions check that these buyers are able to service their loans? In the event of any default, besides re-possession of the property involved, what recourse do these institutions have to recover the outstanding loan amounts from these buyers? If any collateral was listed as the basis for these loans in the first place, is there legal provision and enforceability across national boundaries to undertake such debt recovery?

If the safeguards are not in place, are lending institutions undertaking unnecessary risks to encourage a property bubble looming in our own backyard?

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