Mortgage

[ChaiyaTH]

Better to keep your street clean if you know the next years could offer many cheap deals. You might walk away from this one and suffer up to 7 years from that saving 1.5M baht.
Other hand side, you could use your 1M baht to pay off her debt faster, so she has little left and a good status. This way you also keep the property and the car.

Then you rent her condo on a lease contract for 3 years, talks to buy another property on the bottom thanks to crisis. As of good standing, small debt and existing property with income from rent, she has a fair change of getting it. You then end-up with 2 properties and never had a bad standing. 10 years later she could buy 1-2 more units.

If she goes bankrupt, they could even go after income from a job. A new second hand car would alone cost you a few hundred K, a cheap <deleted>ty studio unit might be found for 500-700K only. So basically you end up with a worser or equal condo, a worser car or no car, and no option do business with banks for up to 7 years.

Clearing might only be 5 years but before those days start to count down, it needs to be official in court, I had a neighbour kicked out of her house that is still not officially done for 2 years later, so in reality it will take her at least 7 years. The question is too if she will still be able to get a good paying job on paper again by then (as age is a thing here).

I mean, if you put the 1M in it is just 500K left, you could pay that off soon after and buy a 2nd and 2rd property with the bank already.
Will make you much more profit on a mid-long term perspective than walking away from the current situation.

Cashflow is king, the bank is your cash cow, don't kill your cash cow for a quick steak. (If that wasn't a quote I now made it one).
It's like a bank robber takes 100K fast while otherwise earning 30K. Then he get caught and can't work 4 years losing 120k on income + no good job after.
You could replace the bank robber with a stereotype bar girl too.

Edited April 19, 2020 by ChaiyaTH

[BritManToo]

50 minutes ago, ChaiyaTH said:

Other hand side, you could use your 1M baht to pay off her debt faster, so she has little left and a good status. This way you also keep the property and the car.

Paying off women's debts is never a good idea.

They just run up more debt, or dump you because you're broke.

Edited April 19, 2020 by BritManToo

[KhaoNiaw]

1 hour ago, BritManToo said:

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.

The interest starts mounting up though?

[BritManToo]

6 minutes ago, KhaoNiaw said:

The interest starts mounting up though?

No, after the 5 years of no credit there's nothing to pay, loan written off.

My former Thai wife owed 500k, they wrote to her once a year saying please pay the debt, she chucked the letters in the bin (it was 10 years back then).

The month after the debt expired, she applied and received a 1.5Mbht home loan.

Edited April 19, 2020 by BritManToo

[hugolars]

2 hours ago, BritManToo said:

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.

Hi,

So she can stop paying and keep living in the house until someone knocks on the door.
She cant own anything for 5 years.
I read someplace the even if she works they cant touch any money she makes below 20 000 B.

 

Nice to hear that the government in this case protect the thais from greedy clutches of banks.

[hugolars]

3 hours ago, Jaxxper said:

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. 

2M for old car and Condo I think is a bad deal these days when cash is king.
Don't care so much about her credit because she will be laid off soon.

[hugolars]

4 hours ago, PaoloR said:

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.

No guarantor and there is absolutely nothing in my name. 

[Elkski]

So many thai women with debt.  At least this debt when paid off she will own something.   Many  Thais with debt and nothing to show.  You need to really dig deep with this woman.  Any other debt?  They feel it's not required to be honest with a bf because she feels this debt is hers,  how can this effect a man?  They dont understand financial planning  or that all of couples finances should be thought of in planning.  I decided it was best to ask debt questions early on and find a debt free GF. 

Edited April 19, 2020 by Elkski

[KhaoNiaw]

40 minutes ago, hugolars said:

Hi,

So she can stop paying and keep living in the house until someone knocks on the door.
She cant own anything for 5 years.
I read someplace the even if she works they cant touch any money she makes below 20 000 B.

 

Nice to hear that the government in this case protect the thais from greedy clutches of banks.

You also have to factor in how long it takes the bank to sell off the property. And also the length of time the bank has to actually go to court. It used to be 10 years on mortgages, but I think it's only 2 years on credit cards now so maybe that's changed on property loans too i.e. they could let the interest add up before taking any action. But you're right that they can't take anything that leaves her with less than 20,000 baht per month. 

[soi3eddie]

19 hours ago, hugolars said:

If she won 2M on the lottery she would pay off the loan, which is stupid.

She entered an obligation willingly to buy the condo and extend finance. If she now won the lottery and paid of the loan then she would be debt free and have no rent or mortgage to pay. It may be advantagious financially now to default on the agreement to pay the monthly loans however that has to be considered against potential consequences of "blacklist" and never getting any future finance.

[jadee]

Hi, in answer to the original question - what happens to a Thai who can't/won't pay - I've got an interesting story. There's a unit on the same floor of the condo I live in (that I walk past everyday on my way to the elevator). It has a big sign from Kasikorn bank on the door saying it's been repossessed. Here's the thing; it's been like that for at least 3 years! So, that's what happens: the bank forecloses on the unit and (tries to) sell it. If it's been difficult these past years - imagine now with all the layoffs. I reckon it could be years between stopping paying and getting kicked out. Absolute years. Plus, no one to sell it too! 

 

[soi3eddie]

6 hours ago, natway09 said:

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

Yes but look at the prices too. I would bet that all are at book value of the original purchase price or loan value. Nothing discounted to current values - in a distressed and illiquid market who knows what a property here is worth - even at the best of times prices are gamble! Something is only really worth what someone is willing to pay... 

[soi3eddie]

12 minutes ago, jadee said:

It has a big sign from Kasikorn bank on the door saying it's been repossessed. Here's the thing; it's been like that for at least 3 years! So, that's what happens: the bank forecloses on the unit and (tries to) sell it. If it's been difficult these past years - imagine now with all the layoffs. I reckon it could be years between stopping paying and getting kicked out.

This raises a good question; how long would it take from point of stopping mortgage payments to actually being evicted? Anyone know the process in Thailand?

[Mayhem11]

Ordinarily the mortgagee repossesses the property, sells it and recoups any undischarged loan money and other costs from the borrower. There is no upside.

 

Edited April 19, 2020 by Mayhem11

[ChouDoufu]

22 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.

is the gf having money problems?  are there huge credit card bills along with the mortgage?  is she getting collections calls or lawyer letters?  and is the mortgage paid up?

 

she is still employed but worried she might get laid off sometime?  any indication of when that might happen?  if so, how much available in savings to get by?

 

guessing there's not been an appraisal to show the 1.5m condo is now worth 0.5m, how about other similar units?  are they selling now for that steep a discount?

Edited April 19, 2020 by ChouDoufu

[BritManToo]

8 hours ago, soi3eddie said:

however that has to be considered against potential consequences of "blacklist" and never getting any future finance.

There are no consequences beyond the 5 years.

My former Thai wife got a 1.5Mbht home loan around 1 month after her 'credit blacklist' ended.

[BritManToo]

8 hours ago, soi3eddie said:

This raises a good question; how long would it take from point of stopping mortgage payments to actually being evicted? Anyone know the process in Thailand?

Around 2 years, sometimes 3, but that was in the past.

What will happen when 40% of the population is suddenly unemployed is anyone's guess.

COVID has made 10M unemployed with maybe another 10M jobs at risk in a workforce of 50M.

 

What point repossession, when there are no buyers at all?

Edited April 19, 2020 by BritManToo

[hugolars]

4 hours ago, BritManToo said:

Around 2 years, sometimes 3, but that was in the past.

What will happen when 40% of the population is suddenly unemployed is anyone's guess.

COVID has made 10M unemployed with maybe another 10M jobs at risk in a workforce of 50M.

 

What point repossession, when there are no buyers at all?

You wrote before that the bank cannot sell  after eviction for price less that original purchase price. Does the law not consider that houses looses value with age? 

This is disastrous for the banks in this Corona crisis when they own hundred of thousands homes that they cannot sell.

 

[BritManToo]

49 minutes ago, hugolars said:

You wrote before that the bank cannot sell  after eviction for price less that original purchase price.

No!

I wrote the bank cannot sell the repossessed house for less than the outstanding loan amount.

[hugolars]

10 minutes ago, BritManToo said:

No!

I wrote the bank cannot sell the repossessed house for less than the outstanding loan amount.

Very interesting. So the higher the loan the bigger the problem for the bank.
From where I come from after eviction, which happen rather quick the object is sold in a action.