Mortgage payment issues should get your prompt and immediate attention

Mortgage payment issues faced by those with outstanding home loans with lenders must be promptly attended to so as to avoid nasty surprises and the loss of your home.

On 3rd November, Channel NewsAsia (CNA) reported the case of Ms. Jasmine Gowrimani Daniel who is facing eviction from a flat she purchased in 2001 due to her alleged failure to pay her mortgage for several years. The Housing Board (HDB) claims she owed approximately S$106,000 (US$77,800) by May 2020. Despite Ms. Daniel’s attempts to contest her eviction in the district court, her case was dismissed in a judgment dated November 3, 2023.

Mortgage payment issues faced by woman with outstanding home loan

Ms. Daniel bought the flat in April 2001 with a loan from HDB. Over the years, she faced financial difficulties, leading to temporary deferments and reductions in mortgage payments. In September 2009, HDB served a notice of intention to acquire the flat due to mortgage payment defaults. Ms. Daniel tried to explain her circumstances but did not deny the arrears.

HDB gave her an opportunity to sell the flat in the open market or make monthly payments of S$1,200 to retain it. The situation escalated in 2016 when HDB informed Ms. Daniel of S$63,123.87 in arrears, followed by a demand for payment. However, she did not comply, and HDB issued another notice in 2017 for S$72,024.37 in arrears.

Ms. Daniel appealed to the Minister of National Development, alleging entrapment, and sought a payment plan. Despite negotiations between Ms. Daniel, HDB, and MND, no agreement was reached, and her appeal was rejected in January 2020.

Ms. Daniel requested extensions to sell her flat, and after several communications, HDB gave her until October 17, 2020, to do so. Instead, she expressed her intention to redeem her mortgage loan, raising disputes about the loan amounts.

In response, MND informed Ms. Daniel of the compulsory acquisition, and on August 26, 2021, HDB notified the town council that the property had been vested. HDB set a date for eviction, and when the day arrived, Ms. Daniel had not removed all her belongings from the flat. HDB and Ms. Daniel both placed padlocks on the gate.

Ms. Daniel filed applications with the court, seeking to set aside the eviction, possess the flat, and collect her items. The court determined that her application was a request for a judicial review, over which it had no jurisdiction. The court ordered her to pay costs to HDB, and she has appealed the decision.

HDB agreed to “remain status quo” with regard to Ms. Daniel’s flat until her appeal is complete, meaning they will not dispose of her belongings during this period.

The case of the woman facing eviction from her flat due to mortgage payment issues offers several lessons for those with outstanding home loans.

1. Financial Responsibility: It highlights the importance of being financially responsible when it comes to homeownership. Meeting mortgage obligations is crucial to retaining one’s property.
2. Communication with Lenders: When facing financial difficulties, it is important to maintain open and honest communication with mortgage lenders. Explaining the situation and seeking temporary assistance or payment plans can be beneficial.
3. Timely Action: Ms. Daniel’s case demonstrates the need for taking timely action when facing mortgage payment difficulties. Ignoring arrears can lead to more significant financial burdens and potential eviction.
4. Legal Process Awareness: Understanding the legal processes and obligations related to mortgage payments is essential. Ms. Daniel’s case involved various legal steps, and being aware of these processes can help homeowners make informed decisions.
5. Seeking Professional Advice: When faced with financial challenges related to mortgage payments, seeking advice from financial counselors or legal experts can be valuable. They can provide guidance on available options and potential solutions.
6. Appealing Decisions: In cases of disputes with government agencies or lenders, it is possible to appeal decisions, as Ms. Daniel did. However, it is essential to understand the jurisdiction of the court and the likelihood of a successful appeal.
7. Property Ownership Consequences: Failure to meet mortgage obligations can result in the loss of property ownership. This case serves as a reminder of the seriousness of such consequences.
8. Record-keeping and Documentation: Keeping accurate records of mortgage payments, correspondence with lenders, and any agreements or disputes is crucial. This documentation can be useful in addressing disputes or appeals.
9. Explore Refinancing: In some cases, homeowners facing financial difficulties may explore refinancing options to reduce their mortgage payments or consolidate debt. This was not mentioned in Ms. Daniel’s case, but it’s an option to consider.
10. Legal Costs: The case illustrates that legal processes can be expensive, and homeowners should be prepared for potential costs associated with legal disputes.

“Overall, the lessons from this case underscore the importance of responsible financial management, timely action, and understanding legal processes when it comes to homeownership and mortgage payments,” said Mr. Paul Ho, chief mortgage officer of iCompareLoan.

“Mortgage brokers can play a valuable role in assisting individuals facing mortgage payment issues by offering guidance and exploring various financial options,” he added,

Here’s how they can help:

1. Assessment of Financial Situation: Mortgage brokers can assess the homeowner’s financial situation, including income, expenses, and outstanding debts, to understand the root causes of mortgage payment difficulties.
2. Access to Lenders: Brokers have relationships with various lenders, including traditional banks, cooperatives, and alternative lenders. They can leverage these connections to find alternative mortgage solutions.
3. Loan Modification or Restructuring: Mortgage brokers can work with lenders to negotiate loan modifications or restructuring. This may involve extending the loan term, reducing interest rates, or adjusting the monthly payments to make them more affordable.
4. Refinancing Options: Brokers can explore refinancing opportunities, which may include securing a new mortgage with more favorable terms. This can help those with mortgage payment issues, lower monthly payments or consolidate existing debt.
5. Debt Consolidation: In cases where mortgage payment issues are related to other debts, brokers can help homeowners explore options for consolidating high-interest debts into their mortgage, potentially reducing overall monthly expenses.
6. Review of Mortgage Terms: Brokers can review the terms of the existing mortgage to ensure that the homeowner fully understands their obligations and potential penalties. This can help in making more informed decisions.
7. Credit Repair: If poor credit is a contributing factor to mortgage payment issues, brokers can provide advice on improving credit scores. A better credit score may lead to more favorable mortgage options.
8. Financial Counseling: Brokers can refer homeowners to financial counselors or advisors who can provide budgeting and financial management advice to prevent future payment issues.
9. Sourcing Alternative Financing: In some cases, homeowners may have non-traditional income sources or unique financial situations that make it challenging to secure a mortgage through traditional channels. Brokers can connect them with lenders who specialise in these situations.
10. Ongoing Support: Brokers can provide ongoing support throughout the process, from initial assessment to final resolution. They can act as a point of contact between the homeowner and the lender, helping to streamline communication.

It’s important to note that while mortgage brokers can be valuable resources, homeowners facing mortgage payment issues should exercise due diligence in selecting a reputable and experienced broker. Additionally, homeowners should be aware that using a mortgage broker may involve fees or commissions, so it’s essential to understand the terms of the broker’s services upfront.

Overall, mortgage brokers can be instrumental in assisting those with mortgage payment issues by exploring various financial solutions and helping homeowners make informed decisions to resolve their financial challenges.