Recently, PSM complained that banks had made it compulsory for apartment buyers to sign two agreements giving the banks absolute right over the apartments, before approving the loans. This included the right to auction the house without prior notice at the bank’s discretion.
The two agreements are known as: The Deed of Assignment and The Power of Attorney. They do not come into effect for landed property.
Speaking to FMT, PSM secretary-general A Sivarajan said his party had come across a case where an apartment that had been auctioned off was bought by a property agent.
“The original buyer had failed to pay the loan for a couple of months and as has happened numerous times, the apartment was auctioned off without the original buyer’s prior knowledge,” he said.
“What we found especially strange – upon our initial investigation – was that the new buyer was actually a property agent.”
Sivarajan said what PSM found most unfortunate was that most of the apartment houses which had been auctioned off in this manner were those that belonged to the bottom 40% of society.
He claimed that most of these people, especially those living in Kuala Lumpur and Selangor, had been forced out of their squatter houses during state-wide operations between 2004 and 2005.
“They were asked to move to low cost houses, and they bought these apartments for around RM42,000.
“Now, more than 10 years later, these houses have gone up in value with some costing as much as RM150,000. This just adds to our suspicion.”
He stressed, however, that there was no actual proof to these claims and that at this point it was all speculation.
“But that’s why Bank Negara, as the regulating body, must investigate the matter. We are afraid that these abuses could be happening.”
Sivarajan also lamented over the way Bank Negara conducted its investigations.
“You see, Bank Negara works on a case by case basis. When it comes to matters like this, the whole issue must be looked at in depth. Investigating case by case is not going to help.”