MPs seek steps to prevent 'magic dollars' flat scam
Greater flexibility in HDB loan rules for downgraders may help, say some
By Jessica Cheam
THE emergence of a new scam by HDB flat sellers has prompted calls by some MPs for a review of loan rules for flat downgrading.
Housing agents say sellers who resort to the so-called 'magic dollars' scam often face financial difficulties and may be having a hard time in downgrading to cheaper flats.
Some MPs noted that greater flexibility in downgrading rules could help these people.
Property agents have recently seen an increase in deals where the seller and buyer collude to under-declare the sale price to the Housing Board.
The buyer pays the difference between this and the real price to the seller in cash, often in return for a discount.
These sellers are likely to have bought their homes at the previous market peak, leaving the flat in negative equity, where the mortgage is more than the property's value.
This means that any sales proceeds will go towards repaying the seller's loan and the money taken from the Central Provident Fund (CPF).
This would leave him with no cash in hand.
The scam provides vital extra cash - indirectly from the seller's CPF monies - in a buoyant HDB market with high resale prices.
Some families struggle to fork out the cash amount over and above a flat's valuation.
Singapore Property - Buy, Sell, Rent, Invest
Jerry Hansin (+65)9027 5537
email: jerry@assetomgt.com
website: www.assetomgt.com
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