A couple file a suit against NTUC Income on a reverse mortgage transaction in which their property was dealt in the middle of falling prices in the property sector.
In 2006, Colleen Ng, who is in her late 50s and his husband Derek Chua, who is in his 70s, declare that they lost their matrimonial house at Upper Serangoon.
Based on a writ of summons filed earlier this month, NTUC Income asked for repayment in a loan secured in 1997 under a reverse mortgage, and the couple said they had to sell their house to requite it.
NTUC Income had been “more than reasonable” in helping the borrowers and the couple had already been notified about the terms of the transaction, the company’s chief financial officer Jeffrey Lee said in an email assertion.
The couple said that their house was priced at $2.1 million over reverse mortgage, and that they were given $495,000 cash as final payment to their old payments and mortgage of about $2,000 a month, based on a loan to valuation ratio of at most 80%.
The couple were stated that their house’s price had fallen to $1.1 million, and based on the outstanding loan of $926,000, they were in a violation of the 80% loan to valuation limit.
The couple also claimed that their monthly obligations of $2,000 were decreased in pace to $1,500 from October that year, and that they were told to top-up $46,400 to reduce the ratio down to the 80% limit.
In October 2005, a year after, NTUC Income claimed that based on the property price of $1.15 million, the outstanding loan at $1.014 million exceeded the 80% limit. The couple also said that they were informed by the company to just get $300 per month up to June 2006, and then the company would “exercise (its) right to recall the property for auction sale”. The couple claimed that according to a letter from NTUC Income, they could find another place to stay or could procure a buyer on their own.
With that, the couple should repay $1,045,802.91. On 30June, the couple received a letter from the solicitors for NTUC Income requiring repayment or else they will confront legal proceedings.
According to their writ, the couple gave the possession of their property on 31 August.
Later the property was sold for about more than $1 million, leaving a so-called deficit of about $55,000, which the pair must pay.
The writ says that the couple claim – if not just for the letter sent by NTUC Income to them, they wouldn’t have sold their home – which was again sold for about $1.5 million in 2008.
Until now, NTUC Income needs to file its defence.
NTUC Income is acted by Rodyk & Davidson, while the couple employed senior counsel Michael Khoo through legal assistance.