In a statement, it said properties without titles would generally be foreclosed through the relevant court process. In such cases, the borrower’s rights to adequate notice and due process are determined by law, it added.
For properties without titles, meanwhile, it said it was common practice for banks to obtain a power of attorney from the borrower to allow the bank to sell the property in default.
“This arrangement is a precautionary step to protect the banks in case of such occurrence. However, banks do still provide adequate notice to the affected borrowers in respect of properties without title,” it said.
ABM was responding to an article by FMT quoting Parti Sosialis Malaysia (PSM) secretary-general A Sivarajan as saying that all “major banks” in the country had occasion to oppress borrowers through the deed of assignment and the power of attorney agreement. He did not name the banks.
He also urged Bank Negara to review the wording of loan contracts between commercial banks and apartment buyers to prevent oppression.
ABM said its member banks were required to adhere to the standards set by the regulator in relation to the recovery of properties in default, to ensure that this was done in a responsible manner.
It added that banks were also required to engage with borrowers early for alternative repayment arrangements.
“Upon detecting any signs of repayment difficulty, banks will proceed to contact customers promptly and proceed to engage in early discussions towards alternative repayment measures to address financial difficulties.
“Foreclosure on the customer’s property (all types of properties) can only be initiated when other reasonable attempts to reach a resolution have been unsuccessful (including to conduct their own private sale before the bank does so).
“Bank documents such as contracts, agreements and policy documents are required to be presented in plain language so that they are easy for readers to understand.
“In instances where the use of legal and technical terminology cannot be avoided, the meaning of these terminologies would be explained or printed in a glossary for reference,” it said.
While there were different types of loan documentations applicable for housing loans, it added, adequate rules were in place to protect the interests of borrowers.
For inquiries or complaints regarding housing loan matters, members of the public can contact ABMConnect at 1300-88-9980 or via eABMConnect at www.abm.org.my.