Buying a Home but Ending Up with Bad Debt
After receiving a collective complaint from nearly 300 households currently purchasing real estate at the Phuoc Hung Commercial Service Urban Area, journalists from the Ho Chi Minh City Public Security Newspaper have gathered information on the plight of those who inadvertently became involved in this infamous project.
Firstly, Mr. Pham Ngoc Hiep (DOB: 1957, residing in District 7, Ho Chi Minh City) shared that in 2021, he received a call from a real estate agent of a well-known company, offering properties in the Phuoc Hung Urban Area project. The agent presented the project’s legal aspects, assured timely house delivery, and highlighted the involvement of a bank that would guarantee loans up to 70%. Mr. Hiep then signed an agreement to purchase a twin-villa with a land area of 360m2 and a floor area of 350m2 in Zone 5, lot SV5-09. The property was priced at over VND 38 billion, with a “basic exterior completion and interior rough work” standard. The expected handover time was two years from the signing date. Accordingly, Mr. Hiep paid more than VND 9.5 billion in cash and signed a debt of over VND 15.2 billion.
However, as of February 2024, the project remains an empty plot of land, with no construction work initiated. Around this time, the developer informed him that the interest rate support period had ended, and Mr. Hiep had to pay the bank an interest rate of more than VND 150 million per month.
Mr. Nguyen Phu Thinh and Dang Huu Khoa sharing their story with the Ho Chi Minh City Public Security Newspaper
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In a similar vein, in 2021, Ms. Le Thi Thu Nga (DOB: 1966, residing in Phu Nhuan District, Ho Chi Minh City) signed an agreement to purchase a twin-villa in the project, measuring 225m2, for a price of over VND 13.8 billion. She made a cash payment of more than VND 3.4 billion and took out a loan of nearly VND 5.6 billion from a bank associated with the developer. Up to now, there is no sign of the property, while the interest has accumulated to nearly VND 100 million per month. Unable to afford the interest, the “customer” has now become a “bad debtor” in Group 5.
Plagued by Debt
Mr. Nguyen Phu Thinh (DOB: 1970, residing in District 12, Ho Chi Minh City) shares a similar plight. He agreed to purchase a twin-villa with an area of 192m2 for a total price of over VND 13.5 billion at the project. After signing the agreement, Mr. Thinh paid more than VND 3.4 billion in cash and signed a bank debt of over VND 5.4 billion. Currently, he has been classified as a “bad debt in Group 5.”
Ms. Nguyen Thi Huong (DOB: 1983, residing in Hanoi) also bought a townhouse in the Phuoc Hung Commercial Service Urban Area project for a total price of over VND 9.1 billion. She has paid nearly VND 5.5 billion so far, including VND 1.8 billion in cash and VND 3.65 billion in bank loans. However, as she cannot afford the repayments, the bank has classified her as a “bad debtor in Group 5.” Similarly, Ms. Tran Thi Tu Anh (DOB: 1989, residing in Binh Thanh District) agreed to purchase a townhouse with an area of 120m2 for a total price of over VND 9.1 billion in 2021. She paid more than VND 1.5 billion in cash and obtained a bank loan of VND 3.66 billion for the developer. Up to now, she has not received the house and has to pay more than VND 50 million in interest per month. Ms. Tu Anh has also been categorized as a “bad debtor in Group 5” by the bank. Sadly, one victim, Ms. Nguyen Thi Duong, passed away on April 9, 2024, due to the stress and pressure of her situation. She had invested all her life savings into the hope of owning a home in Phuoc Hung, only to end up with a hefty bank debt and the daily burden of debt collectors.
The above are just a few representative cases among thousands of victims who have fallen into the abyss of bad debt with the bank due to their purchase of properties in the Phuoc Hung Urban Area project. Recently, when the victims filed a complaint with the authorities of Dong Nai province, they received a response stating that the land did not meet the conditions to open a project due to its overlap with the province’s C4 planning area.
For these individuals, the prospect of receiving their properties is uncertain, and they are burdened with hefty monthly interest payments. The affected residents are currently drafting petitions to various authorities, and we will continue to update our readers as responses from the relevant agencies are received.
LE BINH – TA TUNG
