REVERSE mortgages – launched with much fanfare over a decade ago to help retirees unlock the cash value of their homes – will, for the first time, be at the centre of an upcoming court case.
Mr Derek Chua, 72, and his wife Madam Colleen Ng, 57, have filed a suit against insurer NTUC Income after their reverse mortgage turned sour.
In the writ of summons obtained by The Straits Times, the couple claim that the reverse mortgage scheme entitled Mr Chua to live in the property until he died or sold the property.
They also claim that Income was not entitled to force them to repay the loan if the loan exceeded 80 per cent of their property’s market value.
When the reverse mortgage scheme was launched in 1997, it was seen by the Government as a way for the elderly to get some income from their homes without having to move out.
It offered an income stream for cash-poor but asset-rich retirees. They could use their homes as security for a loan that would be dispensed in monthly cash payouts. Continue reading
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