The Housing and Development (Amendment) Bill 2010 will disallow flat owners from using their HDB flat or sale proceeds as security or collateral for loans by creditors, or for payment of debts, except under approved circumstances. -- ST PHOTO: ALPHONSUS CHERN
A HOUSING bill was sped through Parliament and passed on Monday, putting an end to a growing practice by moneylenders who exploit cash-strapped homeowners desperate for loans.
The Housing and Development (Amendment) Bill now disallows HDB homeowners from using sale proceeds of their home as collateral for loans by creditors, or for payment of debts, except under approved circumstances.
Speaking on the urgency of the bill, National Development Minister Mah Bow Tan told the house that a worrying trend had emerged recently: more home owners were pledging their flat to borrow money, and moneylenders were lodging caveats against the flats to claim a payment from the sales proceeds.
Previously, a legal loophole allowed moneylenders to file a caveat on the flat, which ensures that they get first bite of the proceeds when the flat is sold.
While in 2008 there were only 12 registered resale applications with caveats lodged by moneylenders, the figure shot up to 546 last year; and in just the first half of this year, there were 556 cases. This trend 'undermines the intention of the home ownership policy which seeks to provide a home for our people for long term stay,' said Mr Mah.
Other MPs who weighed in on the Bill on Monday broadly supported it. The last time a Bill was expedited through Parliament using the Certificate of Urgency was during the Sars outbreak in 2003, when the Infectious Diseases Act was amended to provide heavier fines and jail terms for those breaching Home Quarantine Orders.
