Source : Straits Times – 28 Jul 2009
NTUC Income said it empathises with Mr Derek Chua and Madam Colleen Ng, but believes it has acted more than reasonably to assist them.
Income’s chief financial officer Jeffrey Lee told The Straits Times that before signing the deal, the couple were ‘advised by lawyers on all the terms and conditions of the reverse mortgage’.
Under a reverse mortgage, the maximum that Income would lend to a borrower is capped at 80 per cent of the prevailing value of the property. When the ratio reaches or exceeds 80 per cent, it indicates that the maximum loan limit has been reached and steps would have to be taken to recover the loan in accordance with the terms of the reverse mortgage.
During a review in 2004, Income found the ratio of the loan to the home’s valuation had exceeded the upper limit of 80 per cent, said Mr Lee.
Income’s managers met the couple to discuss their options, which included transferring the loan to another family member and renting out rooms for income. The borrowers considered, and elected to sell their property, he added.
Income also said it did not insist that the property be sold immediately, and it gave a grace period of more than two years. It also gave the couple a 10-year loan, at their request, to repay the shortfall, starting in July 2007.
‘NTUC Income has been more than reasonable in trying to assist the borrowers throughout the years,’ it said.
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