Banks not allowed to approve home loan applications at temporary sites

SINGAPORE: The Monetary Authority of Singapore (MAS) says banks are not allowed to approve home loans at temporary locations, whether in—principle, verbal or in writing.

MAS says while the regulator’s rules allow banks to set up a temporary location at a property launch site to receive applications for residential property loans, the loan must be approved or rejected at the bank’s branch.

A spokesperson said a residential property loan is a long—term financial commitment, and allowing banks to approve applications at temporary locations could lead to impudent lending by banks.

This is because consumers may be rushed into accepting a long—term financial commitment, even if a cooling off period is incorporated with the approval.

MAS’ statement comes after United Overseas Bank (UOB) on Wednesday launched a new service where its mortgage brokers are issued with iPads, which are connected to its credit evaluation system.

This makes the home loan approval process easier and UOB had said that potential home buyers at showflats can know on the spot if their home loan application has been approved.

But on Friday, UOB clarified that it does not process loan applications at showflats.

Rather, UOB loan applications are processed and approved at the head office, and that the new service only serves to assess a home buyer’s eligibility for a home loan at selected showflats.

— CNA/wm