Home loan
visuiyer
(Querist) 14 July 2014
This query is : Resolved
I would like to know the consequence of default in home loan.
I have availed a home loan 5 months back and repaid all EMI till date. But I could not pay the subsequent EMI due to block in the financial inflows.
I am arranging for selling the property also; but till such time I can't pay the emi or cannot load on me the interest liability.
I request you to suggest me the consequence of default in home loan. (as I may not be able to honour my subsequent EMI).
since the amount of the loan is less than Rs.10 lacs, I scared, will the banker/financer will take any serious action (though the property is mortgaged with title deed)
Experts pl. advise and guide
ajay sethi
(Expert) 14 July 2014
after issue of legal notice bank will take recovery proceedings to recover the loan amount with accrued interest . better approach bank for rescheduling of loan to reduce EMI payable per month
visuiyer
(Querist) 14 July 2014
thanx for the advise..
but I cannot pay even the reduced emi (if the emi is reduced, the lengthier will be the term which I can't affrd) and I m okay even if the property is taken back by them; as I can save my interest burden atleast..
pl. suggest and give advise.
Guest
(Expert) 14 July 2014
First of all reach the bank and tell them your issues and ask them the way out. Ofcourse bank will seal the property you have taken but recovery notice will still come and legal action can still be taken. Consult a local lawyer and Customer relations of the bank and see if its possible to stop emi for few months maybe (depends from policy to policy) . Alternatively you can take some financial health from your relative or friends maybe.Inform the bank soon rather then waiting for the EMI Post dated cheques which i guess could have been your mode of payment to bounce for non-payment.
ajay sethi
(Expert) 14 July 2014
bank will auction the property for recovery of loan amount . inform the bank of your inability to make further payments
Guest
(Expert) 14 July 2014
Or you may even declare yourself bankrupt. Consult your local lawyer for local procedure. Whatever agreements you sign , better get them checked out with your local lawyer for sure.
Rajendra K Goyal
(Expert) 14 July 2014
Sell the house at market rate and ask the purchaser to deposit the proceeds in the Bank. If enough to meet your liability, its OK otherwise you have to arrange for the balance.
Alternately after following the procedure, Bank may auction the property and definitely the proceeds would be much less then the outstanding as intervening period interest and expenses would also be added. In that case Bank reserves the right to recover balance from you.
Guest
(Expert) 14 July 2014
Am not sure he will be able to sell it as the property papers may be with the bank . Secondly if by chance the property papers are with you then you must have paid atleastt 40% to be legally eligible to sell the property.
krishna mohan
(Expert) 15 July 2014
You may try to sell property if it can get more value than the loan borrowed. In that case you ask the buyer to pay the payment in the form of DD to settle your loan account first as bank may not permit you to sell being mortgaged property as collateral for the loan availed. Consult a reliable property consultant if the property has more demand to fetch a better value.
visuiyer
(Querist) 15 July 2014
Than Q all experts..
but the property value is Rs.10 lacs (450 sq.ft)
disposing small area property is little difficult;
One of our expert has given positive and encouraging opinion, when I talked to him over phone.
Still waiting for the best buyer; and praying for Divine blessings..!!
visuiyer
(Querist) 15 July 2014
I have checked with the banker(HDFC Ltd) officially;
that they cannot release the document unless the full payment is made.
They also confirmed that they will accept cheque/dd from the buyer and the it has to be paid by the loanee (ie cheque from my account only)
I am confused.. and do not know what to do..
experts pl. advise and guide..
(I have now 2 problem; 1. selling the property; 2. paying the amount to HDFC(since they are not accepting dd from the buyer)
RAJU O.F.,
(Expert) 15 July 2014
Have settlement with bank by selling the property by you for closure of the loan. Bank can invoke SARFAESI proceedings if loan is defaulted for 90 days and a/c is classified as NPA. Then bank can directly sell the property for recovery of money advanced by them; but most often, there will not be any surplus money left to you.
visuiyer
(Querist) 15 July 2014
Thank u Raju sir..
but the bank is not allowing me to sell;
by retaining the documents;
instead the bank asking me let the buyer take loan from HDFC.
In short, they would like to retain their interest income (whether paid by me or by the buyer)
pl. help me and suggest...
Mamta
(Expert) 15 July 2014
Mr. Visuiyer first u visit the bank personally and give a written letter to them for deposing of the property by the bank as u r unable to repay the loan amount. according to the rule first bank will ask ur permission for auction of ur property. Or else u find out any buyer who is eligible for receprocate of ur loan amount with the same bank. So, that u will b burden n tension free
visuiyer
(Querist) 15 July 2014
thank u Mamta ji..
but I am scared, that I will be loosing prestige, image and respect which I have created over 35 years...!!
I have given advertisement; I am even prepared to sell at lesser price; but still could not find a buyer...?!!
I am much worrierd..
If I don't get a buyer;
Hopefully believing for the Divine blessings..!!
V R SHROFF
(Expert) 15 July 2014
AT THE MOST, BANK WILL auction your property and recover the dues!! WHY WORRY???
Guest
(Expert) 15 July 2014
I know that your bank is not going to release the papers untill you pay them which i have already told you. You have to get a buyer from outside to sell the property. Contact a property dealer in this regards. Until the property is not sold you have to maintain your EMI payment by anyhow. Like i suggested earlier even to ask from friends or relatives etc. "Prestige , image and respect " won't be the words i will use when i get bankrupt. Simply sell the property soon and remove this liability. Getting the property auctioned is something of a last resort. Also do not tell the property dealer about your bankruptcy.Just tell them that you don't want this property now so you are selling it. Reason for not telling about the actual fact is complicated and i cannot explain that in here but its for your own good if you do not tell anyone that you are bankrupt while selling this property. Query is resolved.
visuiyer
(Querist) 15 July 2014
thank u shroff ji..
but
the bank will auction it at lesser price; and demand me the balance.
my total loss increases by
a) down payment which I have paid
b) furnishing I have done
c) interest cost for the emi so far paid
and still
d) recovery of the difference amount..
will u please advise me
am I loose all so much..!! more than moneytary loss...
I may loose prestige..
(where I am really in trouble)
visuiyer
(Querist) 15 July 2014
than Q sexana ji..
for giving the practical guide and advise..
I will salute u with special thanks..!!
hoping to get a buyer..!!( I have paid this month EMI after a struggle..!!)
RAJU O.F.,
(Expert) 16 July 2014
You find out a buyer to purchase the property for a reasonable value. There is provision in SARFAESI Act for private sales of secured property, by a written treaty (tripartite agreement) of yourself, banker and buyer. Then you can close the loan and you may get some surplus. Otherwise you will have to fight in DRT court through an expert court if bank try to proceed by issue of Possession Notice and Sale Notice.
Biswanath Roy
(Expert) 17 July 2014
Intelligent advice by the expert Mr. Raju O.F. Follow his advice.
visuiyer
(Querist) 17 July 2014
than Q Raju sir ..
I am still finding a buyer; who can take a loan from HDFC...
I have come down and prepared to sell the property at lesser cost also..
the loan outstanding as of now is Rs.7.90 lacs (cost of my purchase is Rs.10.50 lacs plus furnishing that I have done is Rs.0.80 lacs)
I am okay if I can get Rs.9.50 for the property to repay my loan of 7.90 lacs
Please pray for me.. for earlier sale.
Biswanath Roy
(Expert) 17 July 2014
Good and sincere effort never fails. Keep confidence.
visuiyer
(Querist) 17 July 2014
Than Q Biswanath ji..
for your motivating spirits..
With your good regards and
Divine blessings..
I m sure hope it goes positive and I can..!!
Guest
(Expert) 17 July 2014
Consequences of non payment of emi of home loan can be:
1) You won't be able to sell the property without release from the bank;
2) If you sell the property without papers and without the knowledge of the bank, you can be sued for fraud and cheating with the bank;
3) Your credit record will be badly affected at CIBIL on account of which no bank would give you any loan in future;
4) Your property can be acquired and auctioned by the bank on failure to pay emi;
5) You will be at huge loss if the property is sold by auction by the bank; and
6) You will be ultimately homeless and have to pay rent also for any accommodation you hire for your residence.
So, better swap your loan for higher amount with some other bank to foreclose the home loan with the present bank and get additional money to get some relief for some time.
Biswanath Roy
(Expert) 17 July 2014
@ Learned Mr. Dhingra,
I know a Calcutta case where the encumbered property under the State Bank of India purchased by a third party making payment of entire debts and released the property on behalf of the borrower and thereafter by entering into a fresh sale deed purchased the property.
Guest
(Expert) 17 July 2014
Biswanath ji,
My reply was as per the spirit of the query where the querist in the very first line has asked, "I would like to know the CONSEQUENCE OF DEFAULT in home loan."
However, your perception is correct, but sale can only be with due knowledge and prior permission of the bank, or where the prospective buyer is willing to pay the entire amount to the bank on behalf of the debtor to help him to get foreclosure. Otherwise transaction can be treated as illegal. But that depends upon the discretion of the bank in what spirit the bank takes the transaction. In fact, the bank is concerned only with hassel free realisation of their debt including interest.
visuiyer
(Querist) 17 July 2014
Thank U Dhingra ji..
thank u for the advise..
but
I have decided to sell with the prior intimation to the banker/financier
I prefer not to swap for higher amount of loan and increase my commitment (which I can't)
I do un'stand I have to pay rent (which will be at higher considering the Cost of living; but I feel that is better than a Pressuring EMI Commitment)
However, think our your advise and thank u very much for the guide.
Guest
(Expert) 17 July 2014
You are welcome.
Mamta
(Expert) 18 July 2014
mr. V, May i know where ur property situated if it is in Navi Mumbai than i will try to help u out
visuiyer
(Querist) 24 July 2014
thank U Mamta ji..
the property is located at Chengalpet Near Chennai Metro (53 kms from Chennai city)
visuiyer
(Querist) 03 August 2014
I am still waiting for the buyer;
if any one interested can refer the buyer please..
I am ready and open for commercial negotiation.
to know the details abt the property; pl mail me at iyervisuiyer@gmail.com
RAJU O.F.,
(Expert) 04 August 2014
You may try to insert an advertisement for sale of property of Chengalpet; local papers circulated at Chengelpet and Chennai will do.
visuiyer
(Querist) 04 August 2014
thank u ji..
I have done it..
I am getting only enquires; and not got thro'
kindly pray for me please..
visuiyer
(Querist) 25 December 2014
Thank u all for the sincere support and prayers..
I have sold the property @ Rs.9 lacs..
repaid the the bank loan and now relaxing
Thank u all once again for the support and guide.
