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"I am a BLOGGER NOT an expert. This is a BLOG not a 'go-to' website for official information. I represent no one's view save my own. I have neither legal nor financial training, nor do I have anything to do with the real estate industry. My understanding of the Collective Sale Process is from a layman's position only. My calculations, computations and tables are homespun and may contain errors. Please note that nothing in this blog constitutes any legal or financial advice to anyone reading it. You should refer to your lawyer, CSC or financial adviser for expert advice before making any decision. This disclaimer is applicable to every post and comment on the blog. Read at your own risk."
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There is one thing worse than an Enbloc ----- and that is an Enbloc done badly. Since the majority have the necessary mandate to sell, then they owe it to all SPs to make a success of it. Minority SPs can only watch and wait, if they sell then lets pray it's at a price we can move on with, if they don't sell, then we are happy to stay for a few more years.

CPF loss/ Bank Loss

An Anonymous comment

"I believe there is a fundamental flaw in yr presentation. I will be very disturbed if yr inf is correct.
.
Enbloc price: S$395 mil / 560 units = S$705k on average
Beta sum: S$10 mil / 560 units = S$18k (assuming no claim)
Total proceeds from enbloc = S$723k


Each SP will receive S$723k more or less. The buyer will not pay you one single cent more, becos total sales px is S$405 mil.
Regardless the order of charge, there will be financial loss; it is either a cash loss or a CPF loss.
Illustration:Buy px S$580k O/s bank loan S$300kCPF refund S$500k




1. Bank 1st charge CPF 2nd charge Enbloc proceeds S$723k - bank loan S$300k - CPF refund S$500k = CPF loss -S$77k (need not top up)

2. CPF 1st charge Bank 2nd chargeEnbloc proceeds S$723k - CPF refund S$500k - bank loan S$300k = Cash loss -S$77k (must settle b4 bank discharge)

Personally, I feel CPF 2nd charge is more relevant in today context. It afford owner the option to downgrade without topping up CPF loss, which is not the case in CPF 1st charge becos one hv to settle loan shortfall....remember the aftermath of 97 crisis when many pple were trapped in negative equity situation and were forced to continue with heavy servicing burden as they cant afford to settle loan shortfall.

Hence, the real life example you quoted in TC:-

"Blk 130 – Buy price $605k – CPF 1st charge a whopping $949,583 – no outstanding bank loan!!"

is highly unlikely as enbloc proceeds is S$723k only, instead of gain he will suffer CPF loss.
If my understanding on above is correct, I hope you will keep your original posting but add on my findings for readers' benefit
"

I will answer sometime today....

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