State banks to extend loans to the elderly to support living

[webfact]

State banks to extend loans to the elderly to support living

 

 

BANGKOK: -- Two state banks are preparing to extend loans to the elderly aged 60-85 using their houses as collaterals so that they will have money to use on a monthly basis until they die.

 

This was agreed at a meeting between the two state banks, Government Savings Bank and Government Housing Bank, and the Ministry of Finance and the Bank of Thailand yesterday.

 

After the meeting, president of the Government Savings Bank Mr Chatchai Payuhanaveechai revealed that upon receiving the approval from the cabinet, the two state banks would move ahead to introduce loans for elderly people aged between 60 to 85 years.

 

Under this program the elderly applicants can apply for loans using their houses as collaterals and the banks will design a loan package wherein monthly subsistence payments will be paid up to the day they die.

 

But he said critics of the plan however say that the program does not make sense under accounting principles as applicants are still required to make monthly installment payments on their loans.

 

As a result of this a meeting was called between Ministry of Finance and the Bank of Thailand which produced a recommendation that banks must indicate all the details involved in these loans specifically the monthly repayment of interests.

 

For example, applicants who wish to receive 10,000 baht every month from these loans must also pay 100 baht interest payments back to the banks. These will be automatically deducted and it is felt that these repayments are not too substantial and will not overly burden the elderly applicants.

 

Full story: http://englishnews.thaipbs.or.th/state-banks-to-extend-loans-to-the-elderly-to-support-living/

 

-- © Copyright Thai PBS 2016-12-06

[digibum]

Just when you thought Thais couldn't rack up any more personal debt, the geniuses in banking have "invented" reverse mortgages.  Yes, grandma can get loans on her home and pile up a huge debt and the bank will kindly take the home upon her death instead of it being passed on to her heirs.  

 

Of course, the tragic comedy of all of this is that nobody will really understand how this works so sons and daughters will be encouraging their aging parents to take as much money as they bank will give and then they'll spend it like drunken sailors.  When mom dies and the bank files the foreclosure paperwork, and starts kicking people to the street, then they'll finally realize that there's no such thing as a free lunch.  

 

 

 

 

[jerojero]

And when they die the bank gets the house, and nothing left to pass on to the children.

[baboon]

'...Because we care.'

[hdkane]

This is simply predatory lending...

[Peterw42]

There was a trend towards these "selling your house back to the bank" products in Australia in the last 5-10 years. Very deceptive as they were packaged as retirement funding, annuities etc. I recall explaining the concept to an elderly neighbor who was considering it, and once she realized what it was, didnt proceed.

At best they are unethical, at worst they are stealing.

[baboon]

1 hour ago, hdkane said:

This is simply predatory lending...

Would you expect anything different from these scumbags?

[digibum]

What makes this disgusting is that the Ministry of Finance and Bank of Thailand signed off on this.  

 

This is how desperate things are.  They're stealing from little old ladies in order to try to prop up this POS economy that they've driven into the ground.  

 

They've given out all of the credit cards, car loans, home loans, etc, etc that they can.  The people can't afford any more debt.  The banks are already sitting on tons of toxic consumer debt that they won't admit to.  So now they're trying to invent new ways to collateralize assets.

 

Watch over the next 12 months as more and more stuff like this starts happening.  Not loans to little old ladies but increasingly desperate attempts to spur GDP growth.  There's a pattern here.  

[waldroj]

 

While you would not expect it to snow in Thailand, it seems we now have a couple of government banks encouraging older Thais to join a "SKI" club !!!.

 

Meanwhile, their kids aren't going to be too happy (being left out in the cold), when they find out their parents are effectively spending their inheritance ???

[realenglish1]

In the USA they call this a reverse mortgage  and it works well 

[realenglish1]

2 hours ago, digibum said:

What makes this disgusting is that the Ministry of Finance and Bank of Thailand signed off on this.  

 

This is how desperate things are.  They're stealing from little old ladies in order to try to prop up this POS economy that they've driven into the ground.  

 

They've given out all of the credit cards, car loans, home loans, etc, etc that they can.  The people can't afford any more debt.  The banks are already sitting on tons of toxic consumer debt that they won't admit to.  So now they're trying to invent new ways to collateralize assets.

 

Watch over the next 12 months as more and more stuff like this starts happening.  Not loans to little old ladies but increasingly desperate attempts to spur GDP growth.  There's a pattern here.  

You way off the mark here In the USA Canada and Britain they call this a reverse mortgage Why not if it helps them live better

[overherebc]

Would be ideal for me and SWIMBO not sure if the bank would look after the dogs when we go.

[SOUTHERNSTAR]

2 hours ago, baboon said:

Would you expect anything different from these scumbags?

The same is done in many western countries including the US. ALL banks are scumbags not only Thai one's.

[digibum]

10 minutes ago, realenglish1 said:

You way off the mark here In the USA Canada and Britain they call this a reverse mortgage Why not if it helps them live better

 

Uhm, if you look at post #2 in this thread, I state pretty clearly that it's a reverse mortgage.  I know exactly what it is.  

 

1.  I highly doubt it will be marketed to people with full transparency.  Even in this announcement, they don't really spell out that it's a reverse mortgage that will result in the person giving up their home at death.  As a new financial product not available in Thailand before, it's doubtful that older people will be sophisticated enough to properly judge whether or not it is a good choice for them.  

 

2.  It doesn't state that there is either demand or a need for the loans.  Combined with #1 above, a very, very dangerous mix where banks want to sell something that people have not asked for and may not understand.  They'll likely just be told the bank wants to give them 10,000 baht per month for the rest of their life and all they have to do is sign this document.  Hey, who wouldn't want a free 10,000 per month?  

 

3.  It may not be the best option for them financially.  Many of these people may be sitting on land that is valuable enough that if they just sold it outright and rented, they would be in a far better situation.  Granted, some folks want to die on their own land but, again, if you're dealing with people who are ignorant of what options are available to them, they may choose this option rather than exploring other options more to their advantage.  

 

I dont' dislike reverse mortgages in general.  For some, they are exactly what the person needs.  But this is Thailand.  There's a reasonable expectation that these loans will be abused and banks will end up with boatloads of land gained from the most financially illiterate.  

 

There's another thread going on here about the fact that 1% of the country owns 58% of the wealth.  This is surely going to bump up that number a bit more.  

[overherebc]

1 hour ago, realenglish1 said:

You way off the mark here In the USA Canada and Britain they call this a reverse mortgage Why not if it helps them live better

 

Re above do they agree to a monthly payment until the end or lump sum plus payments and who does the valuation on the property?

Genuine question by the way.

[baboon]

2 hours ago, SOUTHERNSTAR said:

The same is done in many western countries including the US. ALL banks are scumbags not only Thai one's.

Err, yes? And?

[SOUTHERNSTAR]

2 minutes ago, baboon said:

Err, yes? And?

Err ah and why try to imply only these Thai bankers are scumbags. It is a widely used structured financing eldery people use that dont have sufficient savings for retirement. Yes their children wont inherit the property but why should they. Yes they will get fleeced but in any bank loan transaction you get fleeced. 

[chainarong]

5 hours ago, baboon said:

Would you expect anything different from these scumbags?

Err No

[chainarong]

That's all U need more debt at 75 , what a good Idea........................................

[baboon]

43 minutes ago, SOUTHERNSTAR said:

Err ah and why try to imply only these Thai bankers are scumbags. It is a widely used structured financing eldery people use that dont have sufficient savings for retirement. Yes their children wont inherit the property but why should they. Yes they will get fleeced but in any bank loan transaction you get fleeced. 

The only implication that Thai bank(ers) are scumbags was the one in your imagination, I'm afraid.

 

Does one really need to post on here with the precision required for legal documents these days?

[sawadeeken]

6 hours ago, hdkane said:

This is simply predatory lending...

 

5 hours ago, baboon said:

Would you expect anything different from these scumbags?

WELL...... NO........

I have read on TV and newspapers that the present Govt. (Army) has sent the Army onto the streets OF BANGKOK (and likely other places) to 'evict food sellers and vendors from the sidewalks, the only method those sellers have to feed their families (and kids)........ Some of those sellers even scraped together enough to provide 'College" for a child or 2 over the years.

2 nieces of my wife graduated College because their parents sold 'fried pork' on the sidewalk in front of some factories. But that is 'NO MORE" thanks to the present policies.......... Army enforced........

Supposedly they are told to take up booths in 'markets' where there are already plenty of people selling the same things and they could not afford to compete for customers.... In addition the company and factory workers who were their customers won't bother to go to those 'markets' to buy their products as they did with them so handy near their place of work, the sellers did quite well on the sidewalks.......... Now most of those people are back in the country side and their kids are eating minimal 'rice with sprinkled fishsauce'' (no nourishment but fills a hungry stomach) and the kids won't get much schooling and as in other impoverished country sides more of them will be sold of to sex-slave trafficers...... While the 'Policy Makers' and the rich get richer ....... and those poor kids didn't get a second thought.......... BUT the sidewalks will be clear......  Thanks to the ones who 'Protect and Serve, (the Army) (who are only following orders).......... And don't forget those 'Street-sweepers' They also will help keep the sidewalks clear.........

Now as this post says, the Govt. is going to allow the banks to foreclose on Grandpa's land where all these displaced sidewalk sellers have had to go to erect a 'shanty' to have a roof over their head and when Grandpa is gone the banks  will take the land that these sellers would have inherited........ and they will be kicked off the sidewalk again..........

Can you see the Banks getting richer and the poor getting poorer..... all with their governments 'thumbs-up' approval............

[slapout]

The bankers who were considered ''fair'' back home were family owned and the family lived in the same small town and knew everyone by name. The difference between intrest paid by bank on saving accounts and intrest paid to the bank on a loan was in the 3% range. Now this was 60 years back.  Since then the banks have started charging for checking accounts, each check run through, they charge to pull your own money out via a electronic service they provide, which was to cut bank cost, loan rates are based on what the money is to be used for and can change during the loan time frame. They require life insurance be purchased with the loan and charge for appraisal, of a property by a subcontractor and some even ask for a little tea money for approving a loan. Scumbag may be a little strong but this reverse mortgage deal they are throwing out for old folks is getting very close to what I would expect from scumbags.

 

 

[sawadeeken]

6 hours ago, digibum said:

What makes this disgusting is that the Ministry of Finance and Bank of Thailand signed off on this.  

 

This is how desperate things are.  They're stealing from little old ladies in order to try to prop up this POS economy that they've driven into the ground.  

 

They've given out all of the credit cards, car loans, home loans, etc, etc that they can.  The people can't afford any more debt.  The banks are already sitting on tons of toxic consumer debt that they won't admit to.  So now they're trying to invent new ways to collateralize assets.

 

Watch over the next 12 months as more and more stuff like this starts happening.  Not loans to little old ladies but increasingly desperate attempts to spur GDP growth.  There's a pattern here.  

 

4 hours ago, realenglish1 said:

You way off the mark here In the USA Canada and Britain they call this a reverse mortgage Why not if it helps them live better

A big difference is that in those other countries the children aren't so desperatly in need of inheriting grandpa's land because they own their own home very often (not 100% mind you) unlike one grandfather I knew (RIP) in Thailand who has 3 or 4 or 5 sons and daughters having built homes on his small plot.............

Haven't you been out in Thailand's countrysides where the "bahn nok" (country folks) live?????

Do you really Know any Thai country folks????

[connda]

Reverse mortgage in a way, just slightly more predatory.  Banks are not philanthropic institutions.  Obviously. 

Edited December 6, 2016 by connda

[Khon Kaen Dave]

Yeah,yeah,its all a con by the bank's.If they cant afford to live,how the F### can they afford to pay back loans.Although,i can see a few unscrupulous grand children pushing the aged GP's to do it,so they can touch them for a few thousand baht.

[Thechook]

I don't like the sound of this.  

 

[NongKhaiKid]

8 hours ago, Khon Kaen Dave said:

Yeah,yeah,its all a con by the bank's.If they cant afford to live,how the F### can they afford to pay back loans.Although,i can see a few unscrupulous grand children pushing the aged GP's to do it,so they can touch them for a few thousand baht.

This is a point isn't it, how many ' live for the moment ' family members will push their old folks to get some money now without bothering to think they may miss out big time later on ?

[rodney earl]

WHAT A RORT!!!

[realenglish1]

15 hours ago, sawadeeken said:

 

A big difference is that in those other countries the children aren't so desperatly in need of inheriting grandpa's land because they own their own home very often (not 100% mind you) unlike one grandfather I knew (RIP) in Thailand who has 3 or 4 or 5 sons and daughters having built homes on his small plot.............

Haven't you been out in Thailand's countrysides where the "bahn nok" (country folks) live?????

Do you really Know any Thai country folks????

If they are desperate to to inherit the property then they should take care of grandpa and not let him mortgage the land 

[Caveat Emptor]

5 hours ago, NongKhaiKid said:

This is a point isn't it, how many ' live for the moment ' family members will push their old folks to get some money now without bothering to think they may miss out big time later on ?

Then they'll complain how the banks conned the old folks while discreetly overlooking any part they played.