Monday, August 06, 2012

Banks cannot approve home loans at showflats: MAS

Banks are prohibited from approving loans at temporary locations such as showflats, according to the Monetary Authority of Singapore (MAS).

While borrowers can file their mortgage applications at such places, the loan must be approved or rejected at a branch, noted the central bank, adding that permitting banks to approve loan applications at such locations “could lead to imprudent lending”.

“When banks entice consumers with loan approvals at temporary locations, consumers may be rushed into accepting a long-term financial commitment, even if a cooling off period is incorporated within the approval,” said an MAS spokesman.

This comes after United Overseas Bank (UOB) launched its instant loan approval service at 76 showflats across Singapore, whereby “home buyers visiting a showflat can receive an approval on the spot for their home loan application instead of an approval-in-principle”.

“A home buyer eligible for a loan receives confirmation of the loan amount, tenor, monthly repayment payable and interest rate package. A letter of offer may then be collected at any UOB branch.”

However, UOB explained that the new service does not approve loans on-site, but assesses loan eligibility of buyers at selected showflats.

View the original article here

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