Mr Nathan (not his real name) is a 54-year-old freelance tutor who lives alone in a rented room in Bukit Merah. He was married with 4 children once upon a time. Mr Nathan tells us in his own words how he came to be in this present situation.
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I got married in 1988. My wife was from India, but she soon got her permanent residence. In 1990, I bought an HDB Executive Maisonette in Choa Chu Kang for about $100,000 with my wife. I was doing a scrap metal business which was doing well and we lived quite comfortably. 3 children were born for me and my wife in the house. This was also the time when the property prices were escalating here.
In 1996, my wife and I decided to sell our maisonette and we sold it for over $600,000 and pocketed almost half a million dollars. I invested a tidy sum in my business, downgraded to a 5-room flat and also put down a deposit for a 99-year leasehold condo in Bukit Batok.
One year later, the Asian Financial Crisis hit. My business was badly affected soon after.
It was a time when the SIBOR rates were hovering around 5 percent. The banks raised the interest rates for the mortgage I had taken for my condo in tandem. The value of my condo dropped and I could not continue servicing my mortgage and defaulted. The bank was not merciful and sued me to recover their loan losses. I had to sell off the condo at a loss to pay off the bank. My youngest daughter was born in 1999, in the midst of all these unfortunate events.
Despite all the hardship, I did not downgrade and stayed in the same HDB flat for about 10 years – not because I wanted to, but the price of my HDB flat also fell during the Asian Financial Crisis. I did not want to have another fire sale and lose more money. The HDB Resale Price Index (RPI) which was at 136 in 1997 crashed to 95 in 1998 and remained in the range of 95 – 110 for the next 10 years, until 2008.
As soon as the resale prices slightly recovered, I sold my 5-room flat and made a profit of $90,000. I downgraded to a 4-room flat. I was entitled to take a second HDB loan but I did not want to pay HDB the resale levy, so I took a bank loan. At about the same time, I scrapped my 10-year-old BMW and bought a brand new Mercedes Benz. The COE was very low at this time and I was able to get 100% loan from a bank to buy the car. In my business, it was important to keep up appearances and the type of car I drove was important.
I used $50,000 of the profits to pay off the debts incurred during the 10-year-period my business was not doing well. I had borrowed heavily from my friends and relatives. The rest of the money I invested into my business, but very soon I again had cash flow problems in my business.
About 6 months after moving into my 3rd HDB flat, I defaulted on paying for my bank mortgage loan. I didn’t think much of it. I had defaulted on HDB loans with my previous flat and they were very merciful and always worked out a payment plan with me. It was a different story with the bank. When my default came up to about $10,000, the bank moved to foreclose on my HDB flat. I was soon staring at an eviction notice.
One day before my family was to be evicted from the flat; I booked a BBQ pit in East Coast Park and drove my entire family there in the pretext of having a cook-off at the beach. My wife was confused but my kids were excited. After we finished eating at the beach, I told my wife and kids that I needed to go to my office for some urgent work and drove off – I never returned.
I abandoned my family because I knew no one was going to take care of the family of a man who was driving a Benz. My wife had never worked a day in her life, but I knew that people will take pity on her and extend help because she had 4 little children. I became incontactable for the next few days on purpose, and remember crying inconsolably during that period regretting my decision at times.
My plan was a simple one, turn my business around and redeem my family as soon as possible. My car was important in this plan to try and turn my business around. I could also not afford to scrap the car and have the bank go after me for the car loan as well.
Things however, did not go according to my plan. Almost a year after I abandoned my family at the beach, I had lost my family, had my Benz repossessed and had been declared a bankrupt.
It has been almost 10 years since I abandoned my family at the beach. I heard that they were provided shelter by a voluntary welfare organisation. My kids must have all grown up by now. I have lost all touch with them. I am sure that I can find them if I wanted to, but my own guilt feelings prevent me from doing that. I now live alone in a rental room all by myself and freelance as a tutor.