Parti Sosialis Malaysia (PSM) has suggested that Bank Negara come to the rescue of low income workers finding difficulty in settling their monthly housing loans by setting up a permanent revolving fund.

Its deputy president M Saraswathy pointed out since the BN government is ever ready to bail out corporate bodies, then the same must also apply to the lower income group who form the majority in the country.

She urged Bank Negara to discuss the matter with the Economic Planning Unit and come out with a working plan with lower interest for the benefit of this disadvantaged group which will reflect Prime Minister Najib Abdul Razak's slogan of "People First, Performance Now".

ipoh ktm land title dispute m saraswathy Saraswathy ( left) said such people are facing a vicious cycle that tragically end up with many losing their homes, declared bankrupt, left debt-ridden as well as hounded by loan sharks.

She said this tragic chain of events starts with the withdrawal of  their EPF savings to meet the down-payment requirements for a housing loan.

And when their  uncertain monthly incomes dip, they default on their monthly payments, the banks drag them to court and their homes are seized.

They then go to loan sharks, and are trapped into paying double the amount originally paid to service their loans.

To illustrate this point, Saraswathy said if the borrower defaults, say 10 months of the RM500 monthly instalments, then the bank will demand the defaulter pay the RM5,000 up-front immediately or the house will be auctioned off.

 They have nowhere turn except to loan sharks who charge high monthly interest rates and end up paying RM1,000 a month to the bank and the loan shark as well.

The inevitable result is the house is auctioned, the borrowers made bankrupt and chased by loan sharks.

Saraswathy claims that each month at least 10 such cases were brought to her attention for her help.

On the short-term basis she wants Bank Negara to reschedule the housing loans of such defaulters.

She added that she had met Bank Negara Corporate Communication Department director Abu Hassan Alshari Yahaya on Dec 2 last year on the issue and he had promised to look into the matter on a case-by-case basis.

PSM will soon hold another meeting with Abu Hassan on the waiving of bank interest for such housing loans.

Today she related the case of a 49-year-old bank loan defaulter in Jelapang, whose home was not only seized by the bank but he and his two sons were also made bankrupt, and now the bank wants vacant possession of the house.

PSM has  brought the case to the notice of Bank Negara on Aug 13, and Saraswathy has also written a follow-up letter on Sept 7 to Abu Hassan and is awaiting his response.