He proposed that developers be allowed to act as money lenders to buyers of their houses at an interest rate of up to 18 percent! By the time the loan is paid off, the buyer would have paid anything from 4 to 6 times what was borrowed. That is like borrowing from loan sharks!
Just what was the Urban Well-being, Housing and Local Government Minister, Noh Omar, thinking of?
If he was thinking at all…
11 September 2016
MCA: Ensure developers do not turn into Ah Long
PETALING JAYA, Sept 11 — Property developers who obtain moneylending licences to provide loans to housing applicants have the potential of becoming Ah Long if their services are not properly regulated.
MCA Public Services and Complaints Department head Datuk Seri Michael Chong said the proposal by the Urban Wellbeing, Housing and Local Government Ministry must be carefully studied as it could be manipulated by certain quarters.
“The ministry must work with Bank Negara to properly regulate developers to ensure only the most credible and financially healthy companies are granted approvals to offer loans,” he said.
“Otherwise, developers would be no different from Ah Long who go around threatening people when they want their money back.”
Chong said both house buyers and developers must be honest for the system to work.
“House buyers should only take loans they can afford while developers must offer loans that would not burden consumers in the long run,” he said.
He said while the scheme would benefit first-time buyers who were unable to secure bank loans, developers must not exploit vulnerable borrowers.
Noh does a U-turn. No more talk about favouring housing developers by letting them be ‘loan sharks’.
Now it’s PRICE CONTROL.
Noh hints of price controls on houses
Minister says national housing policy being reviewed to enable more people to buy their own homes.
TANJONG KARANG: Price controls on houses is under consideration for the government’s national housing policy which is being reviewed, says Urban Wellbeing, Housing and Local Government Minister Noh Omar.
Noh said under the current policy, the government could only control the price of low-cost houses, those costing not more than RM42,000 and 600 sq ft in area.
He said price controls might be necessary to enable the people, especially the middle and lower income group, to own their own homes.
“Looking at the present policy, the prices of houses, apart from low cost houses, are determined by the free market,” he said.
10 September 2016
Not okay for developers to be moneylenders
IMO..giving property developer to act as lender is a recipe for another sub-prime mortgage disaster
Nazir: Risk of debt crisis if developers give loans
CIMB chief commends finance minister II Johari for speaking out quickly and firmly on what was a ‘dangerous idea’.
PETALING JAYA: Prominent banker Nazir Razak, warning of the risk of a debt crisis, has lauded the firm remarks by Finance Minister II Johari Abdul Ghani to quash a proposal for developers to provide housing loans.
Nazir commended Johari for speaking out quickly and firmly on what he called a ‘dangerous idea’, saying: “More unregulated lenders and sub prime borrowers will compound the risk of a debt crisis.”
In an online posting, Nazir quoted Johari’s remark that the proposal “looks like a very unsustainable business model, for developers to borrow money to complete the project and at the same time give loans to house buyers.”
Nazir, who is CIMB Group chairman, said the focus should be on providing access to loans at fair prices from banks, giving subsidies on their borrowing to the most needy, and making more affordable housing available.
‘Plan to turn developers into moneylenders like creating loan sharks’
“Any borrower that takes out a house loan at this rate is like becoming a slave to the lender as they would have paid four- to six-folds of the borrowed sum at the end of the term,” he said.
Noh: My lending proposal was to give home buyers a choice
Urban Well-being, Housing and Local Government Minister Noh Omar said his proposal to allow developers to act as money lenders was meant to give home buyers a choice.
“This proposal is to give home buyers a choice, if they cannot get a loan from the bank, they can do so from developers.
“It is up to home buyers to decide. The choice is in their hands and this is just a proposal,” he said in a Facebook posting.
He pointed out that despite home buyers trying to buy affordable housing constructed by private developers, their applications for loans were still rejected by banks.
“For information, many affordable housing were being constructed by private developers.
“Some home buyers have even been offered to buy them, but they face problems with the banks,” he said.