Bank taking long time to process housing loan

Bank taking long time to process housing loan
28/1/2005 The Star

I APPLAUD the recent decision by Bank Negara Malaysia to regulate the excessive charges imposed by banks and increase transparency in this industry.

Going forward, I urge Bank Negara to help increase expediency and efficiency in our banking system.

About four months ago, I bought a new property under construction.

Under the sale and purchase agreement (S&P) signed between the developer and me , I was given 30 days with another 30 days' grace period to obtain and finalise all financing for the purchase.

Immediately after executing the S&P, I went to a local bank to obtain financing.

Nearly four months down the road, my loan has yet to be disbursed and consequently, I was slapped with a hefty late payment penalty by the developer.

I am very perturbed by the incident as the bank insisted that it would normally take up to three months to finalise and disburse a home loan while the developer has given me a timeframe of two months.

Firstly, I would like to pose to the Housing and Local Government Ministry whether developers are allowed to impose such late payment penalties and whether the two-month timeframe is reasonable.

Secondly, I would like to propose to Bank Negara to impose a guideline on maximum processing time taken by banks to approve and release loans.

I found out from other banks that the processing time varies from three weeks to four months (such as my case).

If not for the fact that I had to pay such a large amount for the penalty, I would have found it amusing that our banks are so inefficient and wonder what would it be like when financial liberalisation fully takes effect in the near future.

Based on the unsavoury episode that I have just experienced, there appears to be a discrepancy in the system. Consumers will always be victims to the developers and at the mercy of the banks.

I hope the authorities will look into this matter seriously.

T. Y. NG,

Petaling Jaya.

(via e-mail)