Not for love of money, but of Humanity. "Greater is he who works for the good of all, then he who works for the good of himself only" ~ Matthew 25:40: "The King will reply, 'I tell you the truth, whatever you did for one of the least of these brothers of mine, you did for me.'"- (NIV). I live in Singapore where the Emperor must not be disturbed.

Sunday, August 24, 2014

Reverse mortgages URGENTLY needed to avoid burdening the poor with increased GST taxes (to help the asset-rich, cash-poor folks live it up)

Consider reverse mortgage scheme to give retirees another option | TODAYonline

PS: I believe that Mr Tan KT's explanation has jumped the gun somewhat in claiming "reverse mortgage scheme could help soak up market liquidity and boost the local economy": by which he means that property prices will fall since (with reverse mortgages) the gahmen need not give asset-rich, cash-poor folks pocket $$$ only to see their kids amassing & monopolising large property empires upon the elder's demise, all sponsored by funds collected from robbing the poor via increased GST. Refraining from increasing GST any further (plateau at 7% as current) will give the poor (who are in majority) more spending $$$, which is what is necessary to run a healthy economy and a harmonious relationship between the elected and the electorate: as opposed to GST perpetuated widened wealth divides that places the state on the verge of revolution, as was the situation building up to the French revolution: as ascribed to the uncontainable animosity between classes due to the widespread labour exploitation and unsustainable inequality in wealth distribution .

Consider reverse mortgage scheme to give retirees another option
A reverse mortgage scheme could help soak up market liquidity and boost the local economy. (Today file photo)
PUBLISHED: 4:04 AM, AUGUST 23, 2014
I, too, hope that retirees use the lease buyback scheme as a last resort. The concerns about ageing and being asset-rich but cash-poor are real, though. (“Sad if success of buyback scheme based on higher take-up rate”; Aug 22)
When the crunch comes, the options are few. And one option not mentioned at the National Day Rally is that of reverse mortgages, although it was said in Parliament in March that the Government is conducting a serious study.
By mortgaging the flat to a bank, instead of using the lease buyback scheme, owners would also receive a steady stream of cash payments to see them through their winter years.
I think the Monetary Authority of Singapore should supervise such a scheme to ensure adequate protection for both the banks and retirees, and that it is financially viable, based on a win-win situation for both parties.
For example, in the event of the mortgagor’s death, the mortgage instrument could allow the beneficiary of the property to continue receiving the monthly payments until the mortgage ends.
The beneficiary should also have an option to redeem the mortgage by settling the amounts disbursed plus accumulated interest to regain the property. This ensures that dependents are not left without a roof over their heads.
The scheme should allow only retirees, and not the young, to mortgage their flats. It should not allow the banks to own the flats or force a sale at the expense of the owner.
The bank should sell the flat to a Singaporean in the open market upon the expiry of the mortgage. And any surplus from the sale should be paid to the mortgagor or the beneficiary.
If the bank cannot get a buyer, it would have the option to sell the flat to the Housing and Development Board. Importantly, the reverse mortgage scheme would help soak up market liquidity and give the domestic economy a boost.
Consider reverse mortgage scheme to give retirees another option | TODAYonline
Picts of news reports showing that PAP has probably scheduled GST increase for 2016:...
 02March2012: DPM Tharman: Government revenues need to be raised.

Full text: 08June2012: Singapore's growth expected to slow in next decade

22August2013: GST hike ‘more likely’ if Govt needs to raise revenue for new initiatives

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