NTUC Income expresses its empathy with Madam Colleen Ng and Mr. Derek Chua, but the company believes its action in assisting the two is ‘more than reasonable’.
Jeffrey Lee, chief financial officer of Income, said that before the couple signed the deal, they were advised by lawyers regarding the conditions of the reverse mortgage.
The maximum amount that could be lent by Income to a borrower on a reverse mortgage is only up to 80 percent of the property’s prevailing value. When the ratio of the two figures reaches 80 percent or exceeds it, this shows that the borrower has reached the maximum loan limit and actions must be taken to be able to recover the loan based on the reverse mortgage terms.
During the 2004 review, the company found that the ratio of the borrower’s loan to the valuation of the home had exceeded 80 percent, said Mr. Lee.
The managers of Income met the couple to let them know their options, including transfer of loan to a relative and by renting out rooms to gain income. The couple considered and chose to have their property sold.
Income also said that it didn’t insist to sell the property immediately, and it even gave two years of grace period. A 10-year loan was also given to the couple at their request as payment for the shortfall, since July of 2007.
“NTUC Income has been more than reasonable in trying to assist the borrowers throughout the years,” the company said.