The ‘welfare’ flaw that turned deadly

[snoop1130]

The ‘welfare’ flaw that turned deadly

By The Nation

 

 

Details have emerged about the military housing project and the payment glitch that apparently led an Army sergeant-major to shoot dead 29 people in downtown Nakhon Ratchasima and wound 58 others last Saturday.

 

It was known almost immediately that the gunman had a conflict with an Army officer and others involved in the project, which allows lower ranks to borrow money to buy houses.

 

Soldiers can borrow the money directly from the Army Welfare Department and buy and own a house on state land as long as they sign a long-term lease with the Treasury Department.

 

But there’s a second approach, involving the purchase of land close to Army bases from private businesses aligned with the soldier’s own unit. The terms are highly affordable.

 

Problems have emerged, though, because base officers have collaborated with businesspeople in allocating funds.

 

Sometimes the amount of the loan exceeds the value of the house, or the loan is borrowed to refurbish the furniture or some other purpose, with the difference being returned to the buyer.

 

Source: https://www.nationthailand.com/news/30382088

 

-- © Copyright The Nation Thailand 2020-02-13

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[YetAnother]

14 minutes ago, snoop1130 said:

Soldiers can borrow the money directly from the Army Welfare Department and buy and own a house on state land as long as they sign a long-term lease with the Treasury Department.

thai logic; they can 'buy' public land (!) and then sign a lease for it

[impulse]

1 hour ago, YetAnother said:

thai logic; they can 'buy' public land (!) and then sign a lease for it

 

Not much different from the West, where you buy land, then lease it from the government in the form of real estate taxes.  Even more insidious, back home you also pay real estate taxes on the house you build on the land with your own funds.   

 

How much are the real estate taxes in LOS?  Here where I'm staying, people pay 2.5-3% per annum for the privilege of "owning" their home.

 

[hotchilli]

14 hours ago, snoop1130 said:

Problems have emerged, though, because base officers have collaborated with businesspeople in allocating funds.

Sticky fingers.. always leads to trouble!

[Srikcir]

18 hours ago, YetAnother said:

thai logic; they can 'buy' public land (!) and then sign a lease for it

The whole arrangement is odd.

What is the collateral for funds borrowed from the Army Welfare Department?

Likely a soldier can't qualify for a loan through Thai banks (not even through TMB?) that requires borrowing from AWD.

The land is described as "state land." That implies that title is held by the Thai Treasury.

Does such a loan by AWD then mean the military essentially has a mortgage against the state as collateral for the AWD loan? So in effect the state finances the loan at terms contrary to the loan debt vs equity requirements established by the BOT.

In another vein, why does AWD exist at all (soldiers are somehow unique compared to other Thai low income citizens?), where does AWD get its funding and if it generates a profit what is done with such proceeds?

[justin case]

22 hours ago, snoop1130 said:

Sometimes the amount of the loan exceeds the value of the house, or the loan is borrowed to refurbish the furniture or some other purpose, with the difference being returned to the buyer.

thai economics different from other countries ?

 

lend money with 7 percent interest over 30 years = you paid DOUBLE the bank for the magically created money out of thin air, than the house is worth

 

specially in thailand... new houses seem to begin to have problems, just after the 1 year guarantee , which is crazy to start with