Government staff owe RM26bil in unpaid housing loans
 02/10/2005 Sunday Star

CIVIL servants across the board owe the Government a total of RM25.9bil in unpaid housing loans.

The Auditor-General’s report said 703,555 housing loans were given out by the end of last year.

The report said the huge amount that was owed sounded fishy because borrowers who were given loans from 1971 to 1979 still had active accounts although the maximum loan period is 25 years.

The housing loan department’s answers to why borrowers between 1971 and 1979 still owed money were:

·THE borrowers paid up their first loan but were given second loans or modifications to their loans for another 20 to 25 years. The approval of these loans referred to their original files so it might have looked like the borrowers had exceeded the 25-year expiry period when in reality they had not,

·There were cases taken to court to recover defaulted payments, and

·Cleaning up of ledgers was being done to clarify the actual amount owed by borrowers.

The department also has a list of borrowers with credit amounts that are unreasonably high, said the Auditor-General.

Credit for 25,411 borrowers as of April this year amounted to RM69mil and they were for loans given out between 1970 and last year.

The department explained that some borrowers’ accounts had a credit balance because of:

·Cases of death where reimbursement was received from the insurance company but progress payments were not made to the developers, and

·Next of kin's lateness in showing inheritance documents to claim credit refunds.

The audit showed 42,936 civil servants owed RM392.7mil while 4,620 police officers owed RM32.9mil and 24,808 armed forces personnel owed RM132.1mil in housing loans.

As of last March, 71,907 borrowers were in default of RM550mil.