Buying a Home but Ending Up with Bad Debt
After receiving a collective petition 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 notorious project.
Firstly, Mr. Pham Ngoc Hiep (DOB: 1957, residing in District 7, Ho Chi Minh City) shared that in 2021, he received a phone call from a real estate agent of a well-known company, offering properties in the Phuoc Hung Urban Area project. After being assured by the seller about the legal aspects, timely handover of houses and land, and especially with the bank guaranteeing up to 70% of the loan, Mr. Hiep agreed to purchase a twin-detached villa with a land area of 360m2 and a usable floor area of 350m2 in Zone 5, lot SV5-09. The standard of the product was “basic exterior finish – interior rough-in.” The total value of the land use right and construction cost exceeded VND 38 billion. The expected time of delivery was 2 years from the signing of the agreement. 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 the same time, the developer announced the end of the interest support period, leaving Mr. Hiep to bear the burden of paying interest to the bank, amounting to 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-detached villa in the project, measuring 225m2, for a price of over VND 13.8 billion. As per the agreement, Ms. Nga paid more than VND 3.4 billion in cash and nearly VND 5.6 billion through a loan from a bank associated with the developer. Up to now, there is no sign of the house or land, while the interest has accumulated to nearly VND 100 million per month. Unable to afford the interest payments, 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 comparable predicament. He agreed to purchase a twin-detached 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. Presently, he has been classified as a “bad debtor 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. Thus far, she has paid nearly VND 5.5 billion, including VND 1.8 billion in cash and VND 3.65 billion in bank loans. However, as she is now unable to repay the debt, 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 sum of over VND 9.1 billion in 2021. Consequently, she paid over VND 1.5 billion in cash and obtained a bank loan of VND 3.66 billion for the developer. As of now, she has not received the house and has to pay interest of more than VND 50 million per month. Ms. Tu Anh has also been categorized as a “bad debtor in Group 5” by the bank. Sadly, a victim named Nguyen Thi Duong passed away on April 9, 2024, due to the stress and pressure of her situation. All her life savings were invested in the hope of owning a home in Phuoc Hung, but now she leaves behind a hefty bank debt of several billion dong.
The aforementioned cases are just a few examples among thousands of victims who have fallen into the dire consequences of bad debt with the bank after purchasing properties in the Phuoc Hung Commercial Service Urban Area project. Notably, in response to the victims’ recent petitions to the authorities of Dong Nai province, an official reply stated that the land in question does not yet meet the conditions for project development due to its overlap with the C4 subdivision plan of the province.
For these individuals, the reality now is that they have neither received their houses nor know when they will, while being burdened with interest payments of hundreds of millions of dong each month. The affected residents are currently drafting petitions to various authorities, and we will continue to update our readers as soon as there is any response or action from the concerned agencies.
LE BINH – TA TUNG
