A realty developer in Ho Chi Minh City has mortgaged and defaulted on an entire condo project in which 600 apartment buyers have already moved.

Tamexim is now on the verge of having the project, The Harmona Apartment in Tan Binh District, foreclosed by the creditor, a BIDV branch, next month.

Apartment owners are worried that they may lose their homes, even though they have nothing to do with the debt issue between the developer and the bank.

The Harmona is located on a 9,100 square meter land plot on Truong Cong Dinh Street, and is a joint venture between Tamexim and Thanh Nien Corp.

In 2011, Tamexim mortgaged the land using right of the project, as well as the Harmona’s three apartment blocks with more than 600 units, for Thanh Nien Corp to borrow money from the Bac Saigon (North Saigon) branch of BIDV.

The creditor said Thanh Nien Corp has repeatedly failed to clear their debt, forcing them to foreclose on the mortgaged assets.

On May 24, BIDV Bac Saigon sent a request to Tamexim asking the company to prepare to hand over their collateralized assets by June 9 in order to resolve the unpaid debt.

The creditor also requested that the assets be returned “in the original form in which no flat owner has moved in,” angering The Harmona residents.

One of the owners, Tung, said buyers of the condo project have nothing to do with the loans of the developer, so they are “under no obligation to move out for the bank to foreclose on the apartments.”

“The debt issue must be solved by the two parties involved,” he added. “We have signed contracts and settled payment with the developer, so they could not take back our apartments.”

The Harmona residents have yet to receive the house owner’s certificate for their apartments, three years after moving in. The condo project broke ground in the fourth quarter of 2009 and buyers began moving in around the second and third quarters of 2013.

The Harmona resdients react to the announcement about the foreclosure. Photo: Tuoi Tre

Nguyen Van Liem, chairman of Thanh Nien Corp, admitted to Tuoi Tre (Youth) newspaper that the company has failed to clear its debt due to “objective reasons.”

But Liem promised that the payment will be settled no later than mid-June.

“We have a very good credit relation with the bank. We were once allowed to borrow up to VND1.2 trillion [US$53.57 million],” he said.

For The Harmona project, Thanh Nien Corp took out a VND500-600 billion ($22.32 million-26.79 million) loan and still owes more than VND240 billion ($10.71 million), Liem admitted.

“Before the foreclosure announcement came, we had expected to clear the debt by the end of this month.”

On May 26, Thanh Nien Corp reached an agreement with the lender to delay the debt clearance until June 15, according to an announcement released the same day by Tamexim.

BIDV Bac Saigon said in a separate document that it would unwind the foreclosure once the debt is cleared.

Liem said Thanh Nien Corp will try to settle the debt issue, take back the property, and issue the house’s owner certificates to its residents.

“We are completing the certificate issuing process, and may start to grant the documents in August, if the foreclosure is undone,” he said.

Nguyen Huy Hoang, deputy general director of Tamexim, also apologized to the apartment owners at The Harmona.

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