“There have been a lot of instances of rogue foreign bankers with hidden clauses victimising local house buyers,” said National Housebuyers’ Association (HBA) secretary-general Chang Kim Loong when asked to comment on new standardised documents adopted by banks for housing loan agreements with effect from Jan 1.
“That must have been what prompted the government to standardise loan agreements. I’ve heard cases of where certain banks very aggressively charge a minimum penalty of, say, RM50, if you’ve defaulted just one day over your due payment date, instead of a pro-rata charge. There are also cases where some banks are very quick in terminating accounts and levying legal fees when the purchaser is late by just one or two months.”
Chang also finds the template consistent and simple with easy to understand language, minus legal jargon and terminology. “Therefore, HBA is in full agreement with Bank Negara and ABM in introducing this standardised template.”
Chang hopes that these new templates will result in the lowering of costs of preparing loan agreements since there is no more any need for specific pre-printed forms from banks and financial institutions which are usually sold on the market for prices ranging from RM250 to RM300 per set.
“However, HBA feels that the RM500,000 cap shouldn’t be the case,” he added. “Why cap it to RM500,000? These standard documents should cover all housing loans. Housing prices have escalated so much that if you narrow it down to RM500,000, only a certain percentage qualify for it.”
Personal finance portal iMoney is in full support of these new documents. “This is great move by Bank Negara,” says iMoney CEO, Ching Wei Lee. “We are a strong advocate of jargon-free finances, particularly when it comes to retail or consumer products.
“We hope the same guidelines will be carried out across all consumer banking products. Mortgage is not the only product that consumers often get confused with. Even a simple product such as a fixed deposit investment or credit card can often be confusing.”