Loan sharks' new tactic: Owe money? Sell house, hand over COV

[General Veers]

Loan sharks' new tactic: Owe money? Sell house, hand over COV

Illegal moneylenders get own agents - some, debtors themselves - to sell victims' homes

Published on Feb 7, 2012

-- PHOTO ILLUSTRATION: LIM YONG

By Elizabeth Soh

Loan sharks have found a new way to get some debtors to pay up: demand that they sell their Housing Board flats and hand over the cash over valuation (COV) quantum.

Illegal moneylenders recruit real estate agents, some of whom are debtors themselves, to carry out the sales.

In return, the agents get commissions of up to 8 per cent, compared with the usual 1 per cent to 5 per cent.

One debtor, engineer David Liew, 37, was involved in such a sale. He owed about $200,000, which he had borrowed to settle gambling debts in 2008.

After three years of struggling to pay off only the interest and being harassed by loan sharks, he decided to sell his four-room HDB flat in Bedok - which cost him $350,000 five years ago.

Read the full story in Tuesday's edition of The Straits Times.
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[General Veers]

Loan sharks want money back at all cost
Lina Chan

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Splashing paint on debtors house was not effective so loan sharks are now getting debtors to sell their flat in order to pay up.

According to The Straits Times, the loan sharks are ordering their debtors to sell their flats and pay them the cash over valuation (COV) quantum.

These loan sharks even went as far as to hire real estate agents to process the sales, and are paying them a commission of up to 8%, compared to the usual 1% to 5%.

In some cases, the agents are debtors themselves. In one such case cited in The Straits Times, David Liew borrowed $200,000 from loan sharks to pay off his gambling debts in 2008.

When he could not pay up, the loan sharks started padlocking his neighbours' houses.

Humiliated by the incident, the 37-year-old engineer told them that he would sell off his four-room HDB flat to pay off his debts.

Upon hearing the news, the loan sharks arranged for a property agent to handle the sales of Liew's flat without his approval.

When Liew refused to surrender his house keys, the loan sharks removed his gates so potential buyers could view his house.

Liew did not report the matter for fear that the loansharks would turn violent against him.

Liew's flat was eventually sold for $500,000 with a COV of $50,000. He was then ordered to pay the loan sharks the COV that he received from the forced sale of his flat.

Liew is still in debt, and continues to pay his illegal moneylenders $3,000 a month.

When Liew's agent was contacted by The Straits Times, he told the reporter that he was selling other debtor-owned units as well.

The high commission was also said to be in exchange for secrecy.

One other agent contacted by the reporter said that he is obligated to sell debtor-owned units as he too, is in debt of about $70,000.

According to a spoksman for the Council for Estate Agencies, 'under the Estate Agents Act, estate agents and sales staff are not allowed to refer a client to any moneylender, licensed or otherwise, or receive any commission or other benefit from any moneylender relating to any moneylending transaction.'

He also added that 'if found guilty, the salesman may be fined up to $75,000 or have his registration suspended or revoked.'

 

[jeevanswaraaj]

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