Response to "Do Banks' HDB Loans Make Mockery of MAS Rules?" (Business Times, 30 December 2004)
I refer to "Do banks' HDB loans make mockery of MAS rules?" (BT, 30 December 2004).
2 Banks and financial institutions are required to ensure that the total amount of credit facilities, including property vendors' loans, obtained for the purchase of residential property does not exceed the maximum permitted by MAS. This applies whether the credit is secured or unsecured. The bank is required to obtain a written declaration from the borrower on the amount of credit facilities he has obtained for the purchase of the property.
3 MAS also prohibits banks from inducing a borrower to use his credit or charge card for any part of the required cash down payment for the purchase of a residential property.
4 These rules are set out in MAS' Notices on Housing Loans and the Banking (Inducement to Use Credit Card or Charge Card for Purchase of Residential Property) Regulations 2002, available at the MAS website (www.mas.gov.sg).