Friday, September 18, 2009

Counsellors find way out of debt for families

ABOUT 800 families who owed the Housing Board money have downgraded to smaller flats in the past year, after receiving debt-management advice from specially trained HDB staff.

In an apparent move to tackle the growing number of households in arrears, the HDB, in September last year, started deploying these housing counsellorsin its branch offices.

And one of them, Ms C. Arasi, said that patience is key when it comes to dealing with home owners with difficult cases.

The bulk of her cases are the ‘more complex’ ones, such as divorced couples who try to push responsibility for settling the loan to the other party, or jobless workers who are unable to keep up with repayments.

The majority of those in arrears are odd-job workers without a stable income or Central Provident Fund (CPF) contributions, she added.

‘Previously, the block officers in charge handled these cases but they may not have the time or skills to deal with these people,’ she said.

‘We are trained to counsel, to empathise.’

She said that many families start to work on settling their debts when they realise that the ‘HDB is willing to listen to their problems and is not there to take over their flat’.

Ms Arasi said some of the home owners she advises have been in arrears for 18 months or even longer.

The counsellors help such people explore their options for settling their debts.

Solutions might include subletting a room to earn some income or downgrading to a smaller flat.

They also refer the unemployed to community development councils to help them in their job searches.

And for families who have to move to smaller flats, housing counsellors will also help to facilitate and speed up the process.

Father of three Abdul Rashid, 49, was one of those counselled by Ms Arasi.

The sole breadwinner started falling behind in his loan payments after he was retrenched from his job as a technician in 2004.

Then, his instalment for his five-room Sengkang flat was about $800 a month but he could not pay for eight to nine months after becoming jobless.

Although he has since found work as a driver, Mr Abdul was advised to sell his flat and move into a smaller unit as his current income of about $1,500 is significantly lower than what he was bringing home when he was working as a technician.

Mr Abdul said that Ms Arasi helped him find a three-room flat and, with the sale of his five-room unit, he has been able to repay his $240,000 loan to the HDB.

‘Now, I feel much lighter and the burden is gone,’ he said.

During the past year of economic turmoil, Members of Parliament said they have seen an escalating number of home owners asking for help after falling into financial trouble.

In February, National Development Minister Mah Bow Tan told Parliament that the HDB has a range of help measures.

These include allowing cash-strapped home owners to reduce or defer their payments.

Mr Mah also said the HDB is prepared to be flexible when it comes to rules stating that second concessionary loans are available only to people upgrading to larger flats.

While the rules will remain in place, he said downgraders would also be considered for loans on a case-by-case basis.

When asked, the HDB did not provide the latest numbers of those who default on their housing loan payments.

However, a Straits Times report in January stated that the number of home buyers defaulting on their home loans for periods of three months or longer has risen significantly over the last five years.

Such defaulters have climbed from 5 per cent to 8 per cent of all HDB home loans.


‘We are trained to counsel, to empathise… Many of these families have the misconception the HDB is there to take over their flat’. - Housing counsellor C. Arasi

Source: Straits Times, 18 Sep 2009

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