Mortgage

[hugolars]

Hello,

What happens if a Thai got a loan to buy a Condo and is unable to pay the mortgage and interest?
You just give the bank the keys to the condo or is it there other repercussions?

Thanks,

[Puchaiyank]

Why don't you call the mortgage company...surely they have many people who can not pay at this time.

[timendres]

As for repercussions, mortgages are typically secured by the property. Thus, the property is taken by the lender. The borrower's credit rating will be severely negatively impacted. Unless the mortgage stipulates some other recourse for the lender, there should be no other repercussions.

[hugolars]

16 minutes ago, timendres said:

As for repercussions, mortgages are typically secured by the property. Thus, the property is taken by the lender. The borrower's credit rating will be severely negatively impacted. Unless the mortgage stipulates some other recourse for the lender, there should be no other repercussions.

Gf bought a used Condo for 1.5M but some how got 2M. She used 0.5M to pay off other debts.
With the situation right now I don't think the Condo is worth 0.5M.

I'm thinking give the bank the keys to the Condo and car and walk away and buy a new condo and car cash.

I think that one can get a lot more for 1M cash today than 2 years ago.
Can there other repercussions than having a bad credit for some years?
Its all in her name.

[blackcab]

Is there a guarantor? A lot of mortgages are only approved if someone guarantees the debt.

 

If this is the case then the guarantor will be pursued to make up the entire shortfall, and they will be expected to provide the shortfall immediately on demand and in full.

[timendres]

22 minutes ago, hugolars said:

Gf bought a used Condo for 1.5M but some how got 2M. She used 0.5M to pay off other debts.
With the situation right now I don't think the Condo is worth 0.5M.

I'm thinking give the bank the keys to the Condo and car and walk away and buy a new condo and car cash.

I think that one can get a lot more for 1M cash today than 2 years ago.
Can there other repercussions than having a bad credit for some years?
Its all in her name.

I assume you mention the car because there is a loan on that also.

 

You are probably correct about condo prices declining, but having defaulted, she will never get another loan for the condo. So cash will be her only choice.

 

As I said, you would need to review the mortgage contract to decide if there were any other recourse for the lender. It is rare, but it is possible. The extra 0.5M baht over the price of the condo raises some questions. This is not an uncommon practice here in Thailand, but it might be addressed in the mortgage contract and have separate conditions from the condo ownership.

[hugolars]

48 minutes ago, blackcab said:

Is there a guarantor? A lot of mortgages are only approved if someone guarantees the debt.

 

If this is the case then the guarantor will be pursued to make up the entire shortfall, and they will be expected to provide the shortfall immediately on demand and in full.

No guarantor. She have a good income to cover the mortgage.

[samsensam]

 

just ask your gf, she's thai, she took out the mortgage so she should know, if she doesn't know all she has to do is phone and ask the lender. easy.

[hugolars]

55 minutes ago, timendres said:

I assume you mention the car because there is a loan on that also.

 

You are probably correct about condo prices declining, but having defaulted, she will never get another loan for the condo. So cash will be her only choice.

 

As I said, you would need to review the mortgage contract to decide if there were any other recourse for the lender. It is rare, but it is possible. The extra 0.5M baht over the price of the condo raises some questions. This is not an uncommon practice here in Thailand, but it might be addressed in the mortgage contract and have separate conditions from the condo ownership.

I now remember that there were two loan contracts. 1.5M and 0.5M. She used the 0.5M to pay off the car and student loan. I really tried to understand how mortgages system is in Thailand but nobody at the bank spoke english.

They some how overvalue the unit to get higher loan than the price.

I think tourism will never be the same ever and many Thais will default. The economies in places like Samui and Phuket are 100% built on tourism. I also think she will be laid off soon.

[hugolars]

6 minutes ago, samsensam said:

 

just ask your gf, she's thai, she took out the mortgage so she should know, if she doesn't know all she has to do is phone and ask the lender. easy.

She does not know and will not even consider to plan ahead. She bough the condo because all her friends did. The language barrier make it difficult do discuss. If she won 2M on the lottery she would pay off the loan, which is stupid.
These things must be regulated by law and I posted here to check if someone have experience in this.

[uncleP]

My mrs bought a house before we married   she talked to the bank and has been given a year of interest only which has halved the mortgage.

[scorecard]

10 hours ago, samsensam said:

 

just ask your gf, she's thai, she took out the mortgage so she should know, if she doesn't know all she has to do is phone and ask the lender. easy.

And also ask the lender if they will be flexible at the moment. And in the same conversation suggest that you (your gf) want to make some payment.

 

Currently It's a bad time for borrowers and lenders. My guess is that lenders know well that taking legal action quickly to gain payment is not a good idea because many borrowers can't pay anything (can't get blood out of a stone), and also don't want to repossess and try to re-sell the property because currently not many buyers around, and lenders not wanting to spend money on repossession costs, marketing costs, so their best deal is to accept reduced payments for a while.

 

Worth checking. 

[sitti]

Call your mortgage company. Currently they are helping borrowers by temporarily reducing monthly payment for 3 months. Specifically, they just delay charging you the principle for 3 months and you only have to pay the interests. After 3 months, monthly payment returns to original amount and your mortgage becomes 3 months longer. No negative on your credit history.

[cardinalblue]

How much mortgage deposit she Put down?

 

why would the condo drop so dramatically? 
 

bad business by the bank if it gave her more money than the condo’s worth minus the down payment...

 

I think the bank would go after her hard To recoup its losses like putting lien of future wages and anything else she tries to buy in the future...

 

 

[crazykopite]

14 hours ago, hugolars said:

Gf bought a used Condo for 1.5M but some how got 2M. She used 0.5M to pay off other debts.
With the situation right now I don't think the Condo is worth 0.5M.

I'm thinking give the bank the keys to the Condo and car and walk away and buy a new condo and car cash.

I think that one can get a lot more for 1M cash today than 2 years ago.
Can there other repercussions than having a bad credit for some years?
Its all in her name.

I think your plan will come back and haunt you and your GF . I would have thought she would have needed a guarantor and if that’s the case the bank will chase them Dare I say face up to your responsibilities if your caught doing anything dodgy expect to be deported back to your home country never to return again.

[cmrichsw]

14 hours ago, Puchaiyank said:

Why don't you call the mortgage company...surely they have many people who can not pay at this time.

You are correct - NEGOTIATE 

[hugolars]

29 minutes ago, cardinalblue said:

How much mortgage deposit she Put down?

0 Bath

29 minutes ago, cardinalblue said:

why would the condo drop so dramatically? 

bad business by the bank if it gave her more money than the condo’s worth minus the down payment...

Because the value of an item is how much someone is willing to pay for it. With tourism dead and millions of jobs lost how many want to buy condo? hence value drops a lot. 

 In good times banks happily lend out money.

 

29 minutes ago, cardinalblue said:

I think the bank would go after her hard To recoup its losses like putting lien of future wages and anything else she tries to buy in the future...

Yes but its regulated by law. Going bankrupt happens every day and unless your loan is from a loanshark it wont hount you for the rest of your life.

[natway09]

Walk into KTB bank & look at all the repossessed properties for sale

[hugolars]

22 minutes ago, crazykopite said:

I think your plan will come back and haunt you and your GF . I would have thought she would have needed a guarantor and if that’s the case the bank will chase them Dare I say face up to your responsibilities if your caught doing anything dodgy expect to be deported back to your home country never to return again.

It nothing shady. Going bankrupt because being laid off is not shady. 

The deposit for the loan is the Condo. No guarantor.

 

I think its like deposit of gold. If you don't pay back they take the gold.

[BEVUP]

41 minutes ago, hugolars said:

It nothing shady. Going bankrupt because being laid off is not shady. 

The deposit for the loan is the Condo. No guarantor.

 

I think its like deposit of gold. If you don't pay back they take the gold.

Your right 

The banks are the shady ones - They just look at the bank book & see that you get a regular income of some sorts ( my wife only had my deposits - house wife, could also be a Guarantor for me )

They just hold the Item as collateral with a Lien on it 

 

On the Default side you could let the bank go through the process of re claim/sell 

But on saying that it may not cover monies actually owned & you would have to pay all Lega costs

 

[LivinLOS]

What is unusual is for the bank to lend so far beyond the purchase price / market value.. 

 

 

[PaoloR]

Ask to see the docs and check them.

1. They will name the guarantor

2. You will also see if the sum has undergone FBI - (Farang Boyfriend Inflation)

Banks just don't lend that much over the value - and are well aware of the Thai habit of finding inflated valuations from legitimate 

sources (for a consideration).

Tread cautiously and find the whole picture before you consider any action. Don't do anything suggested by Thais until you have checked it out with a qualified lawyer. What a Thai person can get away with is not the same as for a Farang - especially in these times.

[Jaxxper]

Maybe I’m missing something. If you have the cash to buy another condo and car cash, why couldn’t you just settle the outstanding mortgage now ? Just interested. Might be cleaner than getting a bad credit rating. 

[Hwood0606]

Perhaps this comment should be a new topic but can anyone explain the Thai credit rating system... asking for a “farang boyfriend”... myself 

[bkk6060]

There is a credit bureau here.  If a Thai wants to buy a car, etc. they should check it.

How up to date and wide ranging it is not sure.

I bet there will be a big increase in loan defaults.

Condos, houses, cars.

Some real bargains I bet in a few months as the slow recovery forces non payers to dump everything.

So glad the only thing I ever bought here was a motorbike.  Oh, and a nice coffee maker.

[KhaoNiaw]

1 minute ago, bkk6060 said:

There is a credit bureau here.  If a Thai wants to buy a car, etc. they should check it.

How up to date and wide ranging it is not sure.

 

Foreigners are also on it. And it's right up to date. I had to request a bureau check when my (now ex-) wife applied for a mortgage with me as guarantor. The Credit Bureau check showed my car loan, up to date with the latest payment information. 
 

[Swimfan]

Generally if they sell the property for less than the value of the loan you are still liable for the difference. 

[robblok]

3 hours ago, hugolars said:

It nothing shady. Going bankrupt because being laid off is not shady. 

The deposit for the loan is the Condo. No guarantor.

 

I think its like deposit of gold. If you don't pay back they take the gold.

She will not be able to get new loans and for many years cant have anything on her name or the banks will take it. So if that is worth it then sure do it. 

[BritManToo]

9 minutes ago, robblok said:

and for many years cant have anything on her name

5 years.

[BritManToo]

17 minutes ago, Swimfan said:

Generally if they sell the property for less than the value of the loan you are still liable for the difference. 

Not true!

Thai banks aren't allowed to sell repossessed property for less than the outstanding loan amount.

(The law was made in an attempt to restrict banks lending unrealistic amounts on property)

 

If you fail to make the repayments, they can take the house back (after several years), and stop you having credit for another 5 years. There's no further money for you to pay.