I was monitoring the mortgagee sales in Singapore since last year as I believed the number of such sales will see sharp increase.
True enough, it was reported by Straits Times yesterday “Mortgagee sales spike as property curbs bite”. According to the article, there were 54 homes put up for auction in the first quarter as mortgagee sales.
You may think this is small number, but this was a 22.7% increase over the last quarter of last year and a 200% increase compared with the same period last year when there were just 18 such listings.
What is Mortgagee Sale?
When the owner fails to make the mortgage payment on the property, the lender (the “mortgagee”, usually the bank) has the right to recoup the loan amount through exercising the powers contained in the mortgage contract.
Usually this is done through the power to sell the property. The bank will typically put the property in auction sale and sell it to the highest bidder, on the condition that the offer is above the “reserve price”.