Oh no no NO, if there is default on payments of interest the property gets marked for auctioning if the buyer fails to clear their debt owed to the bank before VP.

The clause in SPA in practice simply means that the original buyer no longer has any right to claim that they "own" the property.

The developer will still claim from the bank the progressive payments and the bank will simply release the money as claimed by developer from proof of completion of the property's stages as per SPA.

This is when you see auction immediately roll around soon after VP, from defaulters on interest/progressive payments. Because if they're tied to loan it's considered an asset of the bank, and the bank needs to recover THEIR lost money (from the loan disbursement) first.

This post has been edited by DragonReine: Nov 14 2023, 10:42 PM

Yes, this. Very well elaborated.👍

This post has been edited by jojolicia: Nov 14 2023, 10:54 PM

Yeah they'll definitely take swift action to ensure their project name does not come out at the auction house. (whenever possible la haha), as auction may severely affect the valuation as well as image of the project itself and ultimately negatively affecting the developer themselves.

For defaultor loan payer, the bank have right to adjusted the interest is it, do conventional loan have a cap % they can increase? So far I know Islamic loan have cap at 12%. But I not sure this 12 % capped is SBR + OPR or only 1 rate.

Banks have their own limits and policies, cap is typically internal.

For Islamic: https://www.bnm.gov.my/-/resolutions-of-sha...negara-malaysia

But anyhow for me if more than 7% is oredi very very scary cannot imagine if double digit like the old days

Dont ever think about that idea .. bad bad bad 1

Yeah, during old time like 2008, I ever hear my parent said their interest rate for FD is around 7% above, and bank loan rate around 8%+-, that why some Chinese uncle auntie like to buy property with cash or huge amount downpayment(doing business one, cash rich uncle aunty).

When I first time seeing Islamic loan set capping interest rate at 12% (maybe variety by each bank, and time to time will change) I though its capped for economic status (let said OPR hike), and never think it's about defaultor interest adjust rate.

For conventional loan, it not even have a cap. So I can't imagined how bank legally squeeze the loan payer when they are facing financially difficult.

Raising OPR may lead to stronger currency but brings negative to export which our country is pretty much based on a lot of exports. I don't think they will raise it back to that high as it will negatively impact the market so I'm not too worry about getting into that double digit zone again anytime soon.

Should raise it to 6% bar

Confirm CTOS/CCRIS kena masuk record.
Bank will put for Auction shortly.

Don't challenge the agreement once you have sign it unless you are very confident and take advantage on the loop hole.

But I see nowadays the default rate is already like 7 to 8%, some I hearsay even goes to like 10%

10%. Loan shark.

If the defaulter able to clean the default month & secure the unit called off from the auction, will the interest rate adjusted back to normal rate?

The default rate should had already mentioned in your offer letter. Normally is BLR +%..the effective rate should be similar to land financing or personal loan, which around 7%-9%+-

This post has been edited by Rinth: Nov 17 2023, 12:01 PM

Yea haha 10% borderline loan shark dy. I asked this exact question to the banker as well. The usual way is you have to clear off the entire previous amount you owed, then continue paying for 6 to 12 consecutive months without defaulting again or even late payment before they consider adjusting back to your normal rate. The unusual way is clear off the owed amount, then at least be a good paymaster for 3 months, write in surat rayuan to get a faster review for adjustment. But is still up to the internal banker to approve though.