Dear Mr. Tan,
I recently sold my property after holding it for 5 years. The mortgage loan was 85% of the property value. It took 10 weeks from the exercise of the option (by the buyer) and the completion of the sale.
According to my lawyer, the bank wanted to charge the following:
a) Early redemption penalty of 1.5% (which I am aware of and will accept)
b) Interest in lieu of short notice, as I have to give 3 months notice (which I am disputing)
I dispute the payment of the additional two weeks of interest on the following grounds:
a) This clause was not highlighted to me during contract signing
b) The 10 weeks to compete the sale of property is a typical time frame in the industry. Why should I extend my closing date in favour of the banks?
c) Why does a bank need 3 months to basically tabulate outstanding loan amount and receive money?
d) Why should I be charged interests on a Loan that doesn’t exist.
The bank has obviously insisted that the 3 months notice was scripted in the TC of the loan agreement. The principle behind this charge is seriously flawed. If this is a common bank practice across Singapore. I would like to question the validity and need for such a clause in a mortgage agreement.
Here are the steps that you can take:
1. Write a letter of complaint to the media, e.g. Straits Times.
2. Write a complaint to FIDREC, www.fidrec.com.sg
3. Write a complaint to MAS, so that they are aware about how the banks are behaving.
I encourage consumers to fight against unfair terms, even though they have been placed into the complicated legal documents that they were asked to sign. I wish you all the best.
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