Loan scheme for unqualified home buyers violates EPF Act, say Pakatan reps

By Yow Hong Chieh

Feb 04, 2012

KUALA LUMPUR, Feb 4 Putrajaya's skeleton to make make use of of RM1.5 billion from the Employees Provident Fund (EPF) to give home loans to unqualified buyers is in crack of the EPF Act 1991, which sets out permissible investment activities for the fund, Tony Pua pronounced today.

The DAP broadside arch pronounced which whilst the EPF might lend to income to sovereign as well as state governments, corporate bodies as well as even members of the fund to buy or set up the house, it cannot yield loans to people for the purposes of acquiring low-cost apartments regulating the skill as collateral.

Pua pronounced the EPF is not the lender of final review for the poor. File pic

"The fund is committed to preserving as well as growing the assets of the members in the advantageous demeanour in suitability with best practices in investments as well as corporate conduct.

"Therefore, the EPF is not the lender of final review for the bad as well as neither is it the amicable gratification organisation," he pronounced in the statement.

Pua also dismissed Federal Territories Minister Raja Datuk Nong Chik Raja Zainal Abidin's assurance which the contract was on trial by Kuala Lumpur City Hall (DBKL), observant which the loans would be done out without delay to skill owners who might or might not have contributed to the EPF.

The Petaling Jaya Utara MP pronounced which if the low-cost properties were collateral-worthy due to their marketplace cost being aloft than the squeeze cost as the budding apportion has claimed the loans could simply be done around blurb banks instead.

"If DBKL is means to yield the guarantee, as well as the guarantee is even 'better than normal corporate property', afterwards surely, banks will be rushing to yield the loan! s as wel l as not shy divided from them...," he said.

In the separate statement, PKR vice-president Nurul Izzah Anwar questioned if the tall "guaranteed returns" of 5.5 per cent from the due home loans were co-ordinate with the risks of lending to people who could not secure loans from blurb banks.

Nurul Izzah pronounced the EPF is not the personal piggy bank of the BN government

"Because of their really limited amends capability as well as descending under the category of tall luck of default, it would be risky for the EPF to assume which they would unexpected be means to pay off their home loans under this scheme without hiccups," she said.

The Lembah Pantai MP also asked if DBKL could offer on trial earnings if the vast series of lenders failed to service their debt in timely fashion, saying which the easy home financing risked formulating the incident of "serious moral hazard" similar to the US sub-prime crisis.

She added which the supervision should instead make full make make use of of of existing monetary institutions with the amicable gratification bulletin such as Bank Rakyat, Malaysia Building Society Bhd or Bank Simpanan Nasional to implement the "noble initiative".

"The EPF is not the personal piggy bank of the BN government. After all, the EPF is the amicable confidence organization for the insurance of workers' retirement assets as against to the amicable gratification organisation...," she said.

"The supervision can channel the own funds or specific supervision allocations for housing purposes under the sovereign government's annual budget's 'social services' joint to these monetary institutions which will action as the conduit to magnify supervision soft loans to the underprivileged for home squeeze purposes."

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