Ben Ng - HomeLoan Business - Mortgage Agency Business


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HomeLoan Business - Mortgage Agency Business Extra Slides

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Ben Ng - HomeLoan Business - Mortgage Agency Business

  1. 1. Home Loan Product Programme (HLPP) Secured Lending Department (SCL) Updated as at September 2007
  2. 2. Home Loan Product Programme <ul><li>Overview </li></ul><ul><li>Housing Loan Lending Guidelines which define: </li></ul><ul><ul><li>Identified target markets </li></ul></ul><ul><ul><li>Traffic Light Concept </li></ul></ul><ul><ul><ul><li>Red , Amber & Green cases </li></ul></ul></ul><ul><ul><li>Risk Acceptance Criteria (RAC) </li></ul></ul><ul><ul><ul><li>Collateral (section 4) </li></ul></ul></ul><ul><ul><ul><li>Criteria of Borrower (section 6) </li></ul></ul></ul><ul><ul><ul><li>Principal Terms & Condition for Housing Loan (section 8) </li></ul></ul></ul><ul><ul><li>Other sections </li></ul></ul>
  3. 3. Section 2.1 - Target Markets <ul><li>Young graduates and professional </li></ul><ul><ul><li>Family income above RM3000 </li></ul></ul><ul><ul><li>Ages between 21 and 50 </li></ul></ul><ul><ul><li>First time buyer or up-grader </li></ul></ul><ul><ul><li>Key market are KV, Penang Island, Kuching & KK. </li></ul></ul><ul><li>Bumiputra residing in Key Markets </li></ul><ul><ul><li>Ages between 25 and 50 </li></ul></ul><ul><ul><li>Staff of key bumiputra corporates (factory workers excluded) </li></ul></ul><ul><li>Special Housing Loan Scheme (SHLS) </li></ul><ul><ul><li>Ages between 25 and 50 </li></ul></ul><ul><ul><li>Property Value at RM60,000 ( West Malaysia) and RM72,000 (East Malaysia) </li></ul></ul>
  4. 4. Section 2.2 - “Traffic Light” Concept <ul><li>Objective: to promote acquisition drive; specify clearly what cases you “ CANNOT DO & SHOULD NOT DO ” and what you </li></ul><ul><li> “ CAN DO ”: </li></ul><ul><li>RED = cannot do  </li></ul><ul><ul><li>AMBER = may be… ? </li></ul></ul><ul><ul><li>GREEN = can do!  </li></ul></ul>
  5. 5. Section 2.2 – “Traffic Light” Concept <ul><li>RED – unacceptable cases, don’t meet </li></ul><ul><li>RAC & target markets, NOT to proceed </li></ul><ul><li>with application. STOP! </li></ul><ul><li>AMBER – cases where the Credit Risk Officers or </li></ul><ul><li>Credit Controllers are given discretion to approve on the </li></ul><ul><li>merit of each case. Additional justification may be required depending on the nature of each case. </li></ul><ul><li>GREEN – cases where all RAC & target market met. Just do it! </li></ul>
  6. 6. Risk Acceptance Criteria (RAC) Sections 4 , 6 , 8
  7. 7. Section 4: Unacceptable Collateral (RED) Exceptions Properties <ul><li>Drawdown condition:- </li></ul><ul><li>The vendor’s undertaking to refund the amount released if the Assignment between Vendor and Borrower is not perfected. </li></ul><ul><li>To make sure:- </li></ul><ul><li>The remaining lease of the property (at point of loan application) must be ≥ 80 years( West Malaysia) & ≥ 40 years (East Malaysia). </li></ul>d) Sub-sales of properties held under Master title with restriction in interest (Consent from land authorities is required for transfer/charge of properties). <ul><li>Drawdown condition:- </li></ul><ul><li>The vendor’s undertaking to refund the amount released if the Assignment between Vendor and Borrower is not perfected. </li></ul>c) Properties where strata title (non-landed) has yet to be issued after 10 years of completion. <ul><li>Purchase price >RM100K, and </li></ul><ul><li>In prime location list. </li></ul>b) Condo/apartment units aged >15 years. -NIL- a) Fall under “ Negative Property List ”
  8. 8. Section 4 : Unacceptable Collateral <ul><li>Negative Property List </li></ul><ul><li>Refers to those properties which are not marketable and/or those with negative factor that will adversely affect the marketability of such residential properties. Some examples of negative factors are:- </li></ul><ul><ul><li>Close proximity to grave yard, rubbish dump, sewerage pond, </li></ul></ul><ul><ul><li>highly polluted industrial areas, </li></ul></ul><ul><ul><li>Flood prone areas </li></ul></ul><ul><ul><li>Those located on hill slope or in close proximity to hill slopes </li></ul></ul><ul><ul><li>or land slides areas </li></ul></ul><ul><ul><li>New village type of house (eg semi-permanent house – wooden, half brick half wooden) </li></ul></ul><ul><ul><li>Non conformity of building/land use. Residential property used as commercial, </li></ul></ul><ul><ul><li>Properties used for temples, church, storage yard and illegal activities, </li></ul></ul><ul><ul><li>Properties with visible physical/ structural defects. </li></ul></ul><ul><ul><li>Properties where the Bank has experienced aborted auctions due to poor marketability. </li></ul></ul>
  9. 9. Leasehold Properties Remaining tenure of the lease for leasehold properties must not be less than 10 years upon maturity of the loan. Examples:   Acceptance 5 yrs Yr 2015 Yr 2010 20 yrs Yr 2030 Yr 2010 Remaining lease Leasehold maturity Loan maturity
  10. 10. Sec 5.3: Valuation - Compulsory <ul><li>Formal valuation by our Bank’s panel is required for:- </li></ul><ul><li>All completed properties </li></ul><ul><li>Under-construction properties not under our EF schemes </li></ul><ul><li>Completed EF projects </li></ul><ul><li>Top up/Additional facility on existing loan with OCBC </li></ul><ul><li>**** Important Note: </li></ul><ul><li>For “Fees Paid by Borrower” package loans, valuation fees must be borne by customer. </li></ul><ul><li>Annual Update Valuation on Overdraft Facility </li></ul><ul><li>Land + construction or construction only </li></ul><ul><li>1 st Valuation before the drawdown of the vacant land and a 2 nd valuation upon the completion of the construction of the building in not less than 60 days after the construction. </li></ul>
  11. 11. Valuation - Waived <ul><li>For all properties purchased from Bank’s approved EF schemes or Top 46 Developers (including their subsidiaries) in Malaysia. </li></ul><ul><li>Direct purchase from developers NOT under Bank’s approved EF schemes:- </li></ul><ul><li>i) Existing customers with at least 6 months banking relationship and a monthly average of AUM (Asset Under Management) of RM50K, and </li></ul><ul><li>ii) Sales staff to submit information in the CP on the developer and project as per EF project template. </li></ul><ul><li>For low-cost sub-sale property, if MOA is based on original price fixed by Government. </li></ul><ul><li>For completed/under construction properties which already has a valuation report done by the Bank’s valuer on the same project, provided valuation report is completed and not more than 9 months old . </li></ul><ul><li>Properties (except bungalow) where loan sum <RM500,000 AND MOA≤60%. </li></ul>
  12. 12. Valuation: Verbal Check <ul><li>PROPERTIES WITH VALUE OF >RM500,000 </li></ul><ul><li>To obtain 2 Verbal Valuations from 2 Panel Valuers from different companies for cross-check. </li></ul><ul><li>Only 1 formal valuation report is required – select the lower value obtained. </li></ul><ul><li>Record the 2 Valuers and the names of the firms in the “ Remark” column under Collateral in E-Origin. </li></ul>
  13. 13. Valuation Policy (For info only) <ul><li>A) Valuation shortfalls: </li></ul><ul><li>No approval is required </li></ul><ul><li>If verbal indicative value ≠ actual valuation report < 5% and the revised MOA is still within the max level permitted. </li></ul><ul><li>Approval for the variance is required </li></ul><ul><li>If verbal indicative value ≠ actual valuation report ≥5% even though the revised MOA is still within the max MOA permitted. </li></ul><ul><li>Approval will be obtained by Secured Loan Operation (SLO). </li></ul><ul><li>B) Validity of the Valuation Reports: </li></ul><ul><li>Valid up to 9 months prior to the date of loan disbursement. </li></ul>
  14. 14. Section 6.1: Eligibility of Borrowers <ul><li>As an Individual </li></ul><ul><li>Must possess MYKAD as principal identification document (for Malaysians) </li></ul><ul><li> bankrupt or  currently being sued by any party, </li></ul><ul><li>Age should not be less than 18 years </li></ul><ul><li> to be prohibited to borrow by any authorities (eg BNM) </li></ul><ul><li> North Korean Nationals </li></ul>
  15. 15. Foreigner as Borrower Note: No financing is allowed for foreigners who are blue color workers. 50% 60% 60% Category C • Others foreigners with net income equivalent to RM10,000. 20 years or age of 60 years old, whichever is earlier. 70% 80% 80% Category B • Working in Malaysia with work permit (validity 6 mths), holding at least executive positions. • Shareholders of established business in Malaysia for more than 2 years. • Who participates in “Malaysia My Second Home Programme (MM2HP)”. • Singaporeans. • Existing OCBC Group Customer where their credit standing can be verified with our Group. • Who are holding key executive positions in multi-national companies and their positions can be verified with the local subsidiaries in Malaysia. Same as local Category A • Malaysian PR status. • Settled down in Malaysia, i.e. - married the locals & set up their family here. - working here for more than 5 years. • Staff of OCBC Group.   Non-landed (Non-prime) Non-landed (Prime) Landed   Tenure MOA Category of Foreign Borrower
  16. 16. Company as Chargor <ul><li>Housing Loan can be granted to company purchasing residential property, provided:- </li></ul><ul><li>Borrower must be individual - Directors/Shareholders only. </li></ul><ul><li>Market value of the residential property ≥ RM500k . </li></ul><ul><li>Buying properties for occupation of the directors/sharholders. </li></ul><ul><li>Company is not wound-up. </li></ul><ul><li>Strictly a family investment holding company not involved in other business, and wholly owned by directors who are related as immediate family members (ie spouse, parents & children). </li></ul><ul><li>Broad Property Sector (BPS) clearance must be obtained . </li></ul><ul><li>(Attn: Mr Chua Chan Joo, Credit & Risk; Fax No: 03-26982448, Upon approval, he will fax back. Please state : “ Broad Property Sector clearance obtained” in e-Origin Comment) </li></ul>
  17. 17. Credit Reference Information System (CCRIS) MIA*: Months in arrears <ul><li>>3x 2 MIA* in last 12 mths </li></ul><ul><li>Dispute/fraud cases </li></ul><ul><li>Abandoned Project </li></ul><ul><li>** Principal Borrowers (higher income) with no record in CCRIS ( unless foreigners & those without earning capacity such as students, housewives & retirees and GRADUATES) </li></ul><ul><li>Borrowers with suspicious address for work place , eg rooms in hotels or house address=office address. </li></ul>AMBER <ul><li>Rejection of RED CCRIS upfront. </li></ul><ul><li>≥ 3 MIA* in latest 3 mths . </li></ul><ul><li>>1x 3 MIA* in last 12 months . </li></ul><ul><li>Special Attention Accounts (SAA). </li></ul><ul><li>Legal action pending in CCRIS report. </li></ul>RED
  18. 18. Credit Reference Information System (CCRIS) <ul><li>** MOA will be reduced by 10% for :- </li></ul><ul><li>No CCRIS record (CCRIS < 6 mths record will be considered as No record) </li></ul><ul><li>Except a) Graduates (with at last Diploma Certificate) </li></ul><ul><li>b) Foreigner, </li></ul><ul><li>Or </li></ul><ul><li>ii) CCRIS with ≥ 2 months past due in last 6 months. </li></ul><ul><li>Green : </li></ul><ul><li>Prompt conduct of account or ≤1 MIA in last 12 months, OR </li></ul><ul><li>** Green (others) : </li></ul><ul><li>≥ 1x 2 MIA in last 6 months </li></ul><ul><li>≤ 3x 2 MIA in last 12 months, OR </li></ul><ul><li>≤ 1x 3 MIA during the first 9 months. </li></ul>GREEN
  19. 19. Negative Hit List ( CTOS) <ul><li>No negative hit </li></ul><ul><li>Borrower is a director of a company under voluntary winding-up order. </li></ul><ul><li>Legal cases( settled) against the borrower who acts as a guarantor of a loan not related to him BUT the CRISS records show no arrears of >1 MIA in last 12 months. </li></ul>GREEN <ul><li>Dispute/fraud cases. </li></ul><ul><li>Abandoned projects. </li></ul><ul><li>Borrower is a director of a company under involuntary winding up order. </li></ul><ul><li>Settlement date is ≤2 years and the amount in default is </li></ul><ul><li>≤ RM10,000 . </li></ul>AMBER <ul><li>Discharged bankrupt or settlement date ≤ 2 years. </li></ul><ul><li>On-going legal suits or prosecutions . </li></ul>RED
  20. 20. Lending to Non-Residents <ul><li>Foreign interest is allowed to acquire property valued more than RM150,000 and subject to the conditions* . </li></ul><ul><li>FIC approval is waived for foreigners who purchase properties costing ≥RM250K. </li></ul><ul><li>Banks may extend any number and amount of credit facilities to a non-resident to finance or refinance the purchase or construction of immovable properties in Malaysia, excluding purchase of land only. </li></ul><ul><li>However, financial institutions are allowed to grant facilities to finance the purchase of land which is packaged together with the financing for the construction of property on the land. </li></ul><ul><li>ECM 6: Ringgit Credit Facilities to Non-Residents (ECM: Exchange Control Malaysia) </li></ul><ul><li>FIC : Foreign Investment Committee </li></ul>
  21. 21. Acceptable Forms of Income Substantiation <ul><li>Bank statement/EPF statement </li></ul><ul><li>(for private limited co, government bodies/agencies, etc. and pay slip/Commission statement on non security paper) </li></ul><ul><li>3 months pay slips (security paper) or </li></ul><ul><li>6 months Commission statement </li></ul>Pay Slip / Commission Statement <ul><li>With ≥3 months’ transaction history </li></ul><ul><li>Acceptable types of EPF statements </li></ul><ul><li>Type 1 : Half yearly/annual statement sent by EPF Dept. </li></ul><ul><li>Type 2 : Original statement via EPF counter. </li></ul><ul><li>Type 3 : Original statement via E-Kiosk with EPF letterhead </li></ul>EPF Statement <ul><li>Machine validated payment receipt </li></ul><ul><li>Bank statement to verify tax payment made. (if payment receipt is machine validated or with acknowledgement stamped) </li></ul><ul><li>8 months bank statements for non-taxable borrower( For Self-employed). </li></ul>Form B/BE or E-Filing <ul><li>EPF statement, or </li></ul><ul><li>3 months fixed Salary slips (security paper), or </li></ul><ul><li>6 months Commission/variable statement plus </li></ul><ul><li>6 months Bank statement. </li></ul><ul><li>Bearing employer’s company chop & signature. </li></ul>Form EA Other supporting documents Description Income Document
  22. 22. Acceptable Forms of Income Substantiation E.g. Moderated Average =(RM1,500,000 –RM600,000)/6 = RM 150,000 Net Monthly income =RM150,000 x 10% = RM15,000 150,000 Sept 06 Highest 580,000 Oct 06 170,000 Nov 06 100,000 Dec 06 Lowest 20,000 Jan 07 180,000 Feb 07 150,000 March 07 150,000 April 07 Remark Total Deposits (RM) Months Formula to derive Net Income :- 10% of the moderated average monthly deposits for 8 months (minus the highest & the lowest monthly deposits thus only taking an average of remaining 6 months). 8 months personal current/ saving account/ firm or company account (if company is 100% owned by borrower) Bank Statement of Account e.g Tenancy Agreement must be duly stamped Contractual Documents <ul><li>Bank statement/EPF statement </li></ul>Latest 3 months E-Pay slips E-Pay Other supporting documents Description Income Document
  23. 23. Additional Criteria for Income Documents <ul><li>If the original Bank statement is not available, the T ransaction History obtained over counter or downloaded version of bank statement can be accepted provided it is endorsed by the bank officer’s signature & rubber stamp affixed . </li></ul><ul><li>If the bank statement of account or saving passbook (original sighted) only indicates the summary balance without the full details of banking transaction, a downloaded version of account transaction can be accepted provided the transacted amount tally with the summary balance of the account. No verification is required for the downloaded version. </li></ul><ul><li>Photocopies documents must be verified and stamped “Original Sighted” with name, date and signature of the officer. </li></ul><ul><li>Approver/Verification team would request additional documents if they deemed fit (case to case basis) to further substantiate the applicant’s income. </li></ul>
  24. 24. Section 6.4.4 – Self Employed & Deemed Self Employed <ul><li>For Variable Allowance/ Income & Commission – requires latest 6 consecutive months’ statements </li></ul><ul><li>Commission earning constitutes more than 50% of his total income:- </li></ul>70% “ <ul><li>Free lance </li></ul><ul><li>Part timer </li></ul>70% “ <ul><li>Real estate agent </li></ul>70% “ <ul><li>Insurance agent </li></ul><ul><li>Remisier </li></ul>70% If income proof is less than 3 months, only consider basic monthly salary “ <ul><li>Sales representative </li></ul>100% “ <ul><li>Employed by relative </li></ul>100% of substantiation Preceding yr’s Form BE with tax payment receipt, etc… <ul><li>Sole proprietor </li></ul><ul><li>Partner </li></ul><ul><li>shareholder </li></ul>Acceptable monthly income Income substantiation Occupation
  25. 25. Exceptions on Income Doc Substantiation AUM: Asset Under Management ( Loan/FD/Wealth Products) <ul><li>Applicants with CCRIS arrears of not more than 1 month, AND </li></ul><ul><li>Existing Loan Customer (HL/TL/OD) with no classification for the last 12 months , OR </li></ul><ul><li>Existing Deposits Customer with monthly average deposits of ≥RM100K for the last 12 months. </li></ul>Deviation to income substantiation (exceed DSR limit) <ul><li>For Existing customers with average monthly AUM of ≥ RM50K in last 6 months . </li></ul><ul><li>Loan amount ≤ RM750,000. </li></ul><ul><li>MOA ≤ 50% </li></ul><ul><li>Subject to Valuation report i.e. “Drive-By” or “Certification of Valuation (CV)”. </li></ul>Asset Based Lending (for New Purchase, Sub-sale & Refinancing cases) <ul><li>For lawyer, doctor, accountant, dentist, architect, pilot or engineer by profession (whose membership/profession with respective professional bodies or emplyermust be verified) </li></ul><ul><li>Without Cash-out or 80% of MV, whichever is lower. </li></ul><ul><li>CCRIS report must not have arrears of >1 MIA in last 12 months. </li></ul><ul><li>Loan to be refinanced </li></ul><ul><li>- no arrears for the latest 3 months </li></ul><ul><li>- no arrears of >1 month for the remaining 9 months </li></ul><ul><li>Income declared to facilitate DSR computation in E-Origin. </li></ul>Waiver of income documents for Refinancing cases Criteria Type
  26. 26. Debt Servicing Ratio (DSR) Front-end DSR = Proposed facility instalment + OD interest Monthly Net Income Note: Where there are loans pending approval and/or drawdown from the same borrower (jointly or solely) , the instalment of that loan shall be incorporated in the Front-end DSR computation of the current loan application. Back-end DSR = Proposed facility instalment/interest + Total CCRIS commitments Monthly Net Income Net Income:- Net income = Gross Income less income tax & EPF
  27. 27. Debt Servicing Ratio (DSR) - continue <ul><li>Back-end DSR must not exceed 100% of borrowers’ net income UNLESS additional source of income is provided. </li></ul><ul><li>No Maximum capping for Back-end DSR if the MOA ≤ 60% ** </li></ul><ul><li>**Excluding the financing of :- </li></ul><ul><li>1) Vacant residential land plus self-constructed bungalow </li></ul><ul><li>2) Vacant residential land only </li></ul><ul><li>3) Service Apartment </li></ul>With MOA ≤ 60% ** 100% <ul><li>Professional </li></ul><ul><li>i.e. accountant, lawyer, doctor, dentist, architect, pilot & engineer; </li></ul><ul><li>Verification on Professional from:- </li></ul><ul><li>Obtaining a photocopy of professional registration certificate </li></ul><ul><li>verify against employer (for Pilot only). </li></ul>60% Non-Professional 40% For Who? Front-end DSR
  28. 28. Debt Servicing Ratio (DSR) - continue * With exceptional approval from Credit Controller. - - 100% for all 60% and below       T2=70% 60% for profession       100% T1=50% 40% for non-profession >60% With cashout     T2=70% 60% for profession       100%* T1=50% 40% for non-profession 80% and below       T2=70% 60% for profession       100% T1=50% 40% for non-profession 81%-90% No cashout Refinancing - - 100% for all 60% and below       T2=70% 60% for profession       100%* T1=50% 40% for non-profession 61%-70%       T2=70% 60% for profession       100% T1=50% 40% for non-profession >70%   New Purchase Maximum capping on Back-end DSR Back-end DSR (if front-DSR is not met) Front-end DSR MOA Cashout Purpose
  29. 29. DSR Vs Traffic Light Note:- T1 – net monthly income of up to RM3,000 T2 – net monthly income > RM3,000 T1 = 40% T2 = 60% T1 = 40% T2 = 60% Professional=40% Non-prof =30% Amber (OD/Credit Card utilization>70%) T1 = 50% T2 = 70% 100% Non-Prof = 40% Prof =60% Green Back–end DSR (If Front-end DSR is not met) Back-end DSR (If Front-end DSR is met) Front-end CCRIS/ credit utilisation
  30. 30. Section 6.5 – Joint Borrowing <ul><li>Joint application is permitted for borrowers who are related as family members (which include fiancé and fiancée). </li></ul><ul><li>Generally granted based on 1st party charge. 3rd party charge on the property is only permitted if the relationship is defined as above. </li></ul><ul><li>One of the common errors: confusion on 1st & 3rd party:- </li></ul><ul><ul><li>1 st party  Borrower (s) = chargor (s) </li></ul></ul><ul><ul><li>3 rd party  Borrower (s) ≠ chargor (s) </li></ul></ul><ul><li>Please select correctly in e-Origin… </li></ul>
  31. 31. Section 8.1: Scope of Financing <ul><li>For owner-occupied properties only </li></ul><ul><li>For residential properties in high growth areas </li></ul><ul><li>Completed properties for both new purchase or refinancing </li></ul><ul><li>Under construction properties – has to be the Bank’s approved End-Financing Schemes (EF). </li></ul>
  32. 32. Section 8.2: Type of Financing <ul><li>SHLS  HL only </li></ul><ul><li>For Property above RM100,000 and </li></ul><ul><li>Non SHLS loan  HL or HL+OD </li></ul><ul><ul><li>Max ratio for HL:OD  50:50 </li></ul></ul><ul><li>For Property above RM100,000 and Non-SHLS loan  can consider full OD* if net monthly income is RM5000 and above (max MOA 70%, purpose must be specific) </li></ul>* OD >RM250K, commitment fees of 1% pa.
  33. 33. Section 8.3: Refinancing <ul><li>Refinance a HL from other bank to OCBC Bank </li></ul><ul><li>Refinancing amount only subject to redemption sum (including prepayment penalty , discharge & other charges imposed on redemption) </li></ul><ul><li>Additional financing beyond the redemption sum can be granted in the form of Term Loan(TL) or Overdraft (OD) depending on the current market value of the property. </li></ul><ul><li>Total MOA subject to Section 8.4.1 (b) sub section (ii) applies. </li></ul><ul><li>Tenure for the TL: 30 years or up to the age of 65 years , whichever is earlier. </li></ul><ul><li>(for the said TL, HL prevailing rates can be offered) </li></ul>
  34. 34. Section 8.4 Margin of Advance (MOA) 90% + MRTA* 85% + MRTA* 85% + MRTA* 80% + MRTA* 60% + MRTA* <ul><ul><li>at Prime Location </li></ul></ul><ul><ul><li>For Bumiputra customers </li></ul></ul><ul><ul><li>in Penang Island (Non-prime) </li></ul></ul><ul><ul><li>Others </li></ul></ul><ul><ul><li>service apartments </li></ul></ul><ul><li>Non-landed: </li></ul>80% +MRTA* 90% + MRTA* <ul><li>Landed </li></ul><ul><li>- Johor </li></ul><ul><li>( except Muar, Batu Pahat, Segamat & Kluang) </li></ul><ul><li>- Others </li></ul>MOA (%) 8.4.1(a) New Purchase & sub-sale Property type
  35. 35. Section 8.4 Margin of Advance (MOA) 80% 80% <ul><li>Vacant residential land plus construction of bungalow: </li></ul><ul><ul><li>Self constructed bungalow or to be constructed by developers/contractors appointed by developers/self-constructed : </li></ul></ul><ul><ul><li>Tranche A – purchase of land </li></ul></ul><ul><ul><li>Tranche B – construction of bungalow </li></ul></ul>60% <ul><li>Vacant residential land only </li></ul>MOA (%) Property Type
  36. 36. Section 8.4 Margin of Advance (MOA) 85% + MRTA* 85% + MRTA* 80% + MRTA* 80% + MRTA* 60% + MRTA* <ul><li>Landed </li></ul><ul><li>Non-landed (prime) </li></ul><ul><li>Non-landed (non-prime) </li></ul><ul><li>Landed & Non-landed (Johor Bahru) </li></ul><ul><li>Service Apartment </li></ul><ul><li>Note: The list of Prime properties will be selected based on confirmation by our Panel Valuer and subject to approval by Head of Secured Lending & Credit Controller. </li></ul>90% + MRTA* 90% + MRTA* 80% + MRTA* 80% + MRTA* 60% + MRTA* <ul><li>Landed ≤RM2m </li></ul><ul><li>Non-landed ≤RM1.5m (prime) </li></ul><ul><li>Non-landed (non-prime) </li></ul><ul><li>Landed & Non-landed (Johor Bahru) </li></ul><ul><li>Service Apartment </li></ul><ul><li>ii) Refinancing with cash-out/ Top up loan </li></ul>MOA (%) 8.4.1.(b) Refinancing/Top up of Existing Loan i) Refinancing without cash-out Property type
  37. 37. Section 8.4 Margin of Advance (MOA) iii) For MOA above 80%, CCRIS must NOT have no records ( unless graduates) and NOT more than 1 month in arrears in the past 6 months. iv) For applications that do not meet CCRIS criteria as stated in (iii) and/or exceeded refinancing loan limits as below table, the total MOA must not exceed 80% of current market value ( landed & non-landed) and 60% ( for Service Apartment). Loan Limit for Refinancing RM500,000 RM 1 mil RM1.5 mil Non-landed RM 1 mil RM 2 mil RM 2 mil Landed Others Kajang, Klang, Johor Bahru, Kota Kinabalu, Kuching KV & Penang Island Type of Property
  38. 38. Section 8.4 Margin of Advance (MOA) <ul><li>For Non-Graduate borrowers without credit history (CCRIS with <6months will be treated as no CCRIS) and with 2 months past due or more in the last 6 months in CCRIS, MOA will be lower by 10%. </li></ul><ul><li>For Graduate borrowers (at least Diploma), MOA will remain unchanged provided the applicant submit Certification proof (photocopy only, no verification required) </li></ul><ul><li>The credit history in CCRIS requirement does not apply to foreigners. </li></ul><ul><li>* Full MRTA financing subject to aggregate MOA not exceeding 100% of purchase price or market value, whichever is applicable. </li></ul>
  39. 39. Section 8.4 Margin of Advance (MOA) <ul><li>Sec 8.4.5 Max loan amount per property </li></ul><ul><li>Sec 8.4.6 Loan Limit </li></ul><ul><li>Maximum loan amount (HL and OD combined) per borrower under this HLPP shall not exceed in aggregated sum of RM5 million for purchase of residential properties. </li></ul><ul><li>Sec 8.4.7 </li></ul><ul><li>MOA for Malay Reserve Land (MRL) will be accorded a MOA which is 10% lower than the respective levels of MOA as stipulated above with the exception of Kelantan . ( * OCBC cannot take charge over MRL in Federal Territory (KL) and Perlis). </li></ul>RM1 mil RM3 mil Kuching, KK RM500,000 RM 1.5 mil RM 1.5 mil Non-landed RM 1 mil RM 3 mil RM 4 mil Landed Other areas JB, Klang, Kajang KV* & Penang Island Type of property
  40. 40. Section 8.5 Tenure <ul><li>The minimum loan tenure is 3 years . The maximum loan tenure is up to 30 years or age of 65 years old, whichever is earlier for housing loan. </li></ul><ul><li>Graduated Home Loan is up to 40 years or age of 70 years old, whichever is earlier. </li></ul><ul><li>For joint borrowing, the maximum tenure of the facility can based on the age of the younger co-borrower (only if the co-borrower has income) . </li></ul>
  41. 41. Section 8.7 & 8.8 Repayment & Prepayment <ul><li>8.7 Repayment </li></ul><ul><li>Repaid by fixed monthly instalment </li></ul><ul><li>Under construction – can either choose to service interest or start instalment after first loan release. </li></ul><ul><li>Payment of monthly instalment is given 14 days grace period . </li></ul><ul><li>8.8 Prepayment </li></ul><ul><li>No prepayment notice is required </li></ul><ul><li>If loan is settled prematurely within specific period, penalty will be charged. For “ Fees paid by bank ” package, additional administration fee will be imposed. </li></ul><ul><li>Prepayment penalty and terms shall be reviewed from time to time. </li></ul>
  42. 42. Section 8.9 Redrawing of HL Facility <ul><li>Redraw feature is available for Non Special Housing Loan (Non SHLS) </li></ul><ul><li>Available redraw amount is the amount paid in Capital Repayment ( excludes capital repayment from EPF withdrawal & payment for advance instalments) </li></ul><ul><li>Redrawing is subject to following conditions : </li></ul><ul><ul><li>3 working-day notice given </li></ul></ul><ul><ul><li>Service fee of RM10 paid per redrawal </li></ul></ul><ul><ul><li>Minimum RM5000 , and in multiples of RM1000 </li></ul></ul><ul><ul><li>HL is fully disbursed </li></ul></ul><ul><ul><li>Original tenure not expired; loan account not fully paid/ not closed </li></ul></ul><ul><ul><li>No event of default </li></ul></ul><ul><ul><li>One redrawing request per day </li></ul></ul>
  43. 43. Illustration: <ul><li>Why sometimes customer is not allowed to redraw amount that paid in as Capital Repayment earlier?? </li></ul><ul><li>Some examples:- </li></ul>X Loan has been restructured (i.e. capital repayment paid and customer requests to shorten loan period/ adjust instalment) X Loan has not been fully disbursed (Any capital repayment made during under-const period can be redrawn in the following month upon full release) X Account has been classified (eg, SPM, NPL….)
  44. 44. Section 10: Credit Processing & Approval Any subsequent deviation from the T&C approved in CP Approval is required from approving authority, ie… Approval NOT required . But to inform SLO and document it in CP file, ie… <ul><li>Increased facility limit, or </li></ul><ul><li>Prolonged credit tenure , or </li></ul><ul><li>Weakened security coverage (eg increase in DSR due to wrong calculation, change of land type from freehold to leasehold, etc) </li></ul><ul><li>Change of land type from leasehold to freehold </li></ul><ul><li>Change of property details , eg from single storey to double storey </li></ul><ul><li>Change of collateral details , eg for CFO issuance – from “No” to “Yes” </li></ul><ul><li>Change of title type from master title to individual/strata title </li></ul><ul><li>Revision in monthly instalment pursuant to capital repayment subject to cancellation of redraw facility </li></ul><ul><li>Change from servicing of interest to servicing instalments and vice versa during progressive releases stage </li></ul><ul><li>Cancellation of MRTA financing which results in lower loan limit and consequently, lower monthly instalment, subject to revision in interest rate, where applicable. </li></ul>
  45. 45. Sec 10.2.5 End-Financing Scheme <ul><li>For project developed from Top 46 Developers & not in Negative Property List, need to submit a notification to Developer Sales & Marketing Department , stating:- </li></ul><ul><ul><li>Name & location of project </li></ul></ul><ul><ul><li>Types & number of units under development (including price range and built up/land area) </li></ul></ul><ul><ul><li>Expected date of launch. </li></ul></ul>
  46. 46. Section 11.2 Solicitors Who Handle Documentation <ul><li>All legal documentation should be done by the Bank’s panel solicitors , and approved list of reciprocal list . </li></ul><ul><li>For other referral solicitors to handle the documentation, approval must be obtained from Mortgage Sales Department. </li></ul>
  47. 47. Section 14: Insurance <ul><li>Fire insurance is compulsory . Property must be insured by Bank’s Panel of Insurers and born by customer . </li></ul><ul><li>For u/construction building, upon completion of the building, a normal fire insurance policy should be taken. </li></ul><ul><li>Insurance policy shall be renewed annually until full settlement of the loan. </li></ul><ul><li>Mortgage Reducing Term Assurance (MRTA) is optional. </li></ul>
  48. 48. Facility Codes (eOrigin creation) Daily rest, Graduated Home Loan, Variable rate. HL 130(HG) Daily rest, Graduated HL Fixed rate. HL 224 (HI) OD (for personal consumption) OD 101 Daily rest, for variable rate pricing package TL 059 Daily rest, for fixed rate pricing package TL 093 OD eHome (purpose: purchase of residential property) OD 109 Daily rest, for fixed rate pricing package HL 092 Daily rest, for variable rate pricing package HL 035 Monthly rest, property up to RM60k for West Malaysia & RM72K for East Malaysia SHLS 002 Description Loan Facility codes