THE number of defaults on HDB home loans is expected to increase if the economy 'goes down even further', said National Development Minister Mah Bow Tan yesterday.
'As we all expect, if there are further job losses, then inevitably there will be more arrears cases coming up,' he said at HDB Hub.
Measures to help struggling home owners have been in place since the last downturn. These include deferring payments, downsizing flats or extending loans.
Parliament was told recently that there are about 33,000 flat owners owing the HDB arrears of three months or more. They comprise less than 8 per cent of the 420,000 households with HDB loans.
Mr Mah was responding to a question by The Straits Times about plans to help such home owners in the downturn.
'We have to look at individual cases to see what is the situation for each particular case. The main criteria is to help them to tide over...to make sure there is a sustainable solution,' he said.
He said deferring mortgage payments does not help in the longer term as home owners still have to pay and interest builds up.
Owners are encouraged to downgrade if they cannot afford a large flat, and if they have financial difficulties, HDB could extend another loan, he added.
This is an example of a sustainable solution, 'making sure that their loans are smaller... and they are able to survive this crisis and build up their finances from then on', said Mr Mah.
This article was first published in The Straits Times on December 13, 2008.
