Some banks say they want to handle bad debts but face many difficulties as most of collateral is property while the real estate market is frozen.
A banker in HCMC told the Daily that the frozen property market had caused banks many difficulties in handing debts. He himself negotiated to buy a house of a borrower whose loan was categorized as bad debt and then found out that the house had been put up for sale for two years but failed to find buyers.
He said that each bank had its own process of handling bad debts, including the resorting to the court as the last option if both sides failed to arrive at a selling price for the mortgaged property.
According to another banker in charge of corporate clients, liquidity of the property market is poor and handling collateral as property is not easy if there are no buyers. He cited the case of a client who had bought a house at VND7.5 billion but unable to sell it at VND5.5 billion.
He said that the bank had to negotiate with the client first before bringing the case to the court and it would take much time if the client was not cooperative.
The director of a property trading floor said that he had received dossiers of around 70 properties ready for liquidation from banks since the year’s beginning. These properties are mortgaged houses whose owners are insolvent and banks have negotiated with borrowers to sell them to recover debts, she added.
She said that an average of three houses was sold each month on her trading floor, including those consigned by borrowers. Only one-third of the houses consigned by banks were sold by her company in the seven-month period.
By Thuy Trieu and Dinh Dung - The Saigon Times Daily