Help Needed - Family Member About To Get The Boot?

[Pakeha]

I tried posting this in an old thread but got no response so I'm trying here with a dramatic topic title...

Can anyone explain how mortgages work with BAAC?

What is the interest rate?

What are the payment terms (25 years?)?

What happens if the monthly payments aren't made?

Can a mortgage (and property) just be signed over to my thai partner?

We have a family member who's deep in the sh_t and my partner wants to take over ownership of the property from them and therefore the debt that goes with it. I would just pay it off now but the exchange rate is miserable at the moment as you may have heard... So I'd rather pay the mortgage monthly if we can.

They'll still stay there and assumingly pay no rent so it's a <deleted> terrible investment I know!

Any help greatly appreciated. Sounds like the bank will boot them out if we don't step in

[Junglejumbo]

i think that your Thai partner can more easily access the details of his family's mortgage terms than any poster may be able to by guessing here.

Usually the government supported banks are highly flexible although this may change if they think there's foreign money around the corner. For the bank to take back the property in Thailand it can take 2-3years so you still have time to play with.

[Pakeha]

i think that your Thai partner can more easily access the details of his family's mortgage terms than any poster may be able to by guessing here.

Usually the government supported banks are highly flexible although this may change if they think there's foreign money around the corner. For the bank to take back the property in Thailand it can take 2-3years so you still have time to play with.

Thanks JJ. The issues are:

1) We offered to buy the house 2-3 years ago when they started having problems but they didn't want to do this. Instead they have preferred to just not make one mortgage payment for that period of time .

2) A year ago we again offered to take over the mortgage and we were told we had to pay the debt off in full for the bank to allow the property to be signed over to us. I wasn't prepared to pay anything whilst the property was still in their name. I'm not completely insane!

3) We had a call last week from the family saying they want us to buy the property and my partner spoke to the bank who now say we could have the property signed over to us and take over the mortgage.

I'm confused. The bank seems to have changed their position. My partner will be going to see the bank personally in 2 weeks but I want to know what the norm is for mortgages through BAAC in this sort of situation.

[Carmine6]

Bankers all over the world have a radically different outlook on things from 2 years ago.

I don't know anything about the Thai banking system or this bank, but here's the way I see it:

In this case, they're 2 years past due and would have to put the property on the market at a bad time. Compared to that, someone taking over payments is a dream come true, no matter who made the offer, third party, relative, etc. Avoids the whole long sale process and unless you negotiate past due penalties, the old loan is paid in full.

I'm not sure what taking over the mortgage means, but since ownership of the property changes I would guess it has to be a new loan. If so I think that turns this from bad debt into a current loan again. Basically the past due interest and penalties are added to the balance and paid off with the new loan.

Compared to 2 years ago, you're now giving them an easy way out. If this were the US, I'd say play a little hard ball about them waiving penalties, fees, and maybe the interest.

But in Thailand, you might get a permanent no from the bank, so maybe tread lightly because of the family issues.

[Pakeha]

Bankers all over the world have a radically different outlook on things from 2 years ago.

I don't know anything about the Thai banking system or this bank, but here's the way I see it:

In this case, they're 2 years past due and would have to put the property on the market at a bad time. Compared to that, someone taking over payments is a dream come true, no matter who made the offer, third party, relative, etc. Avoids the whole long sale process and unless you negotiate past due penalties, the old loan is paid in full.

I'm not sure what taking over the mortgage means, but since ownership of the property changes I would guess it has to be a new loan. If so I think that turns this from bad debt into a current loan again. Basically the past due interest and penalties are added to the balance and paid off with the new loan.

Compared to 2 years ago, you're now giving them an easy way out. If this were the US, I'd say play a little hard ball about them waiving penalties, fees, and maybe the interest.

But in Thailand, you might get a permanent no from the bank, so maybe tread lightly because of the family issues.

Thanks Carmine6. That's fair advice and I would agree with you for many countries.

Unfortunately in this situation I am looking for specific information from anyone who does know something about the Thai banking system . And ideally they'll have some knowledge of BAAC. Maybe I should post in the Isaan or farming forum???

[Carmine6]

Thanks Carmine6. That's fair advice and I would agree with you for many countries.

Unfortunately in this situation I am looking for specific information from anyone who does know something about the Thai banking system . And ideally they'll have some knowledge of BAAC. Maybe I should post in the Isaan or farming forum???

Yeah I was mainly trying to show you that you're doing them as much a favor as they are for you. So there's not some magical reason they've changed their mind.

Your original post was about loan terms, then you mainly seemed concerned with why they'd be willing to transfer the loan.

What is it you're asking/worried about? That they'll have some weird terms on the loan due to the situation?

[Pakeha]

Thanks Carmine6. That's fair advice and I would agree with you for many countries.

Unfortunately in this situation I am looking for specific information from anyone who does know something about the Thai banking system . And ideally they'll have some knowledge of BAAC. Maybe I should post in the Isaan or farming forum???

Yeah I was mainly trying to show you that you're doing them as much a favor as they are for you. So there's not some magical reason they've changed their mind.

Your original post was about loan terms, then you mainly seemed concerned with why they'd be willing to transfer the loan.

What is it you're asking/worried about? That they'll have some weird terms on the loan due to the situation?

Mainly just trying to establish if the loan and the property ownership can be transferred to my partners name. Once we were told the loan had to be paid off in full before the property ownership could be transferred. That would seem the normal way in the west but normally a new loan from one entity would pay off the exisiting loan for another entity. In ths situation it would seem we would be paying off someone elses loan. So what's to stop them from deciding not to sign over the property ownership? If you see where I'm coming from.

Then I want to know what the norm is for BAAC loans. If I stroll into a branch sporting my farang face there will be two problems - 1) I won't be able to understand them as my thai is limited; 2) They'll be rubbing their hands together and I wouldn't expect a favourable outcome.

My partner will go and talk to them but she's not that good with financial matters. BAAC seem to be completely different to a normal bank. A normal bank wouldn't let you not pay your mortgage for 2 years!

I've confused myself now so wouldn't be surprised if this makes no sense to you carmine6 Thanks for your help though.

It would seem no one else knows anything about BAAC. I would have thought Naam would be all over this. Where are you Naam???

[Carmine6]

I think what is being considered is a pay off of the old loan with a new one. Basically a sale of the property. Otherwise the loan will still be in default (unless you pay all 2 years to catch up). I would guess even in Thailand there are accounting and regulatory standards to meet.

Get some legal advice if your partner says it's anything other than a sale type transaction. Well, get some legal advice anyway, but since your parnter is in touch with them, you want to know if it is a new loan to pay off the old one, how much the new loan is for, etc.

There's nothing unusual about a bank paying off a loan with another. Happens all the time in the west, but just more common on the commercial side.

If it's feeling squirrely, then start looking into other lenders and buy the property to remove all doubt. Don't let it get to the point where you're told one thing for weeks then come signing its something different.

Edited March 3, 2009 by Carmine6

[Pakeha]

Thanks carmine6.

Has anyone else had any dealings with baac?

[coventry]

Why get involved Byoung ? Would you do the same for the brother in law back home ? I doubt it. Why is it Thai always want farang to bail out family members ? As for having not paid their mortgage for 2 years. First rule of thumb in Thailand, never believe a Thai. Walk away Byoung it's not your problem.

Edited March 3, 2009 by coventry

[Pakeha]

Why get involved Byoung ? Would you do the same for the brother in law back home ? I doubt it. Why is it Thai always want farang to bail out family members ? As for having not paid their mortgage for 2 years. First rule of thumb in Thailand, never believe a Thai. Walk away Byoung it's not your problem.

It's my partners choice. We both work, both bring in income and therefore both get a say in what it's spent on. I invest in various things and I believe she should be allowed to make decisions about investments also. She wants to help her family out. Also, I'm not that concerned about buying the property because it's not a huge amount of money for us and it'll be a reasonable long term investment, albeit pretty poor in the short term.

And as for the first rule of thumb... Well, what can I say? You must have had some bad experiences. I'm sorry to hear that. But I do trust my partner.

[Pakeha]

Why get involved Byoung ? Would you do the same for the brother in law back home ? I doubt it. Why is it Thai always want farang to bail out family members ? As for having not paid their mortgage for 2 years. First rule of thumb in Thailand, never believe a Thai. Walk away Byoung it's not your problem.

Yes and I have done a similar thing for my brother, although it was not property related. Aren't family there to support each other? I believe what goes around comes around.

[coventry]

Why get involved Byoung ? Would you do the same for the brother in law back home ? I doubt it. Why is it Thai always want farang to bail out family members ? As for having not paid their mortgage for 2 years. First rule of thumb in Thailand, never believe a Thai. Walk away Byoung it's not your problem.

Yes and I have done a similar thing for my brother, although it was not property related. Aren't family there to support each other? I believe what goes around comes around.

Too much off topic to continue. I still say stay out of it. Good luck

[Pakeha]

Too much off topic to continue. I still say stay out of it. Good luck

Cheers. I'll probably need it ...

So does anyone out there know anything about BAAC?