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SuperNuvos (Own)     10 January 2014

Home loan default

Hello Experts,


 My wife and I co-own a property in Mumbai. I had been paying EMI from my salary account. My wife was contributing any paise towards the repayment of the loan. My wife is working and has a separate bank account and pays income tax. Due to some reasons, I have been defaulting on paying the EMI recently  due to increased expenses. I do not think that we will be able to pay the EMIs any further.  In this case, bank will certainly attach our house and will be put it for auction.

My query is:

1. Once the house is auctions which I understand will be at lower than market price. After how much time since I have continously defaulted on the EMI payment will the bank initiate the process of auction?

2.  Will the bank return any money back to us after deducting the remaining home loan?

3. If yes, how is the money returned by the bank?

4. Will the remaining account be returne to the account from which  EMI were being paid?


5. How does the non-payment of EMI result in the credit rating of my wife and myself? What impact can it have on future borrowings?

 

Warm regards



Learning

 10 Replies

Ajit Singh Cheema (practising Advocate)     10 January 2014

1) Definitely it shall be a very low price.

2) It may take Three to six months.

3)After adjusting your loan account ,if there is any surplus ,the bank is bound to return.

4) Depending upon your request , the amount may be credited to your account .

5) It shall definitely Adversely effect your credit rating.

It is advisable that you may contact your Banker immediately and request them to allow you to yourself sell the house at market price and get the account adjusted.

Ajit Singh Cheema (practising Advocate)     10 January 2014

1) Definitely it shall be a very low price.

2) It may take Three to six months.

3)After adjusting your loan account ,if there is any surplus ,the bank is bound to return.

4) Depending upon your request , the amount may be credited to your account .

5) It shall definitely Adversely effect your credit rating.

It is advisable that you may contact your Banker immediately and request them to allow you to yourself sell the house at market price and get the account adjusted.

Kumar Doab (FIN)     10 January 2014

If your wife is a co borrower of home loan then convince her to contribute to pay EMI or you shall loose the property to bank.

If your wife is a not a co borrower or guarantor of home loan then convince her to contribute to pay EMI or you shall loose the property to bank.

However if she is not the borrower/guarantor or has not consented to loan then how come bank has granted loan on jointly owned property?

Since you are apprehensive of loosing the property why don’t you get the market value evaluated from approved valuer and submit to bank under proper acknowledgement and also find a buyer on your own and enter into an agreement with bank for sale of property under home loan by which bank shall recover its entire outstanding an you shall also get better amounts...............?

Property dealers, investors are known to go for such properties........

 

 

 

K.K.Ganguly (Advocate)     11 January 2014

1. If the said property is mortgaged with the Bank against the loan taken, the Bank will first declare your account as Non Performing Asset i.e. N.P.A to initiate SARFAESI Proceeding. NPA is declared after the EMIs are not paiod for 90 days at a stretch,

 

2. Bank will return the excess amount to the mortgagor/borrower,

 

3.& 4. In any form the borrower/mortgagor wishes,

 

5. Yes, it will effect the credit rating of te borrower. 

Rutumbhara Nayak (lawyer)     16 January 2014

Dear Nuvo- If your wife a co- borrower of home loan then convince her to contribute to pay EMI or you shall loose the property to bank.Even if she is not a co-borrower then convince her to contribute for the home loan or else the bank will attach your house and will be put it for auction. 1. If the said property is mortgaged with the Bank against the loan taken, the Bank will first declare your account as Non Performing Asset. NPA is declared after the EMIs are not paiod for 90 days at a stretch. Since you are sceptical of loosing the property you can get the market value evaluated from approved valuer, an expert and attach the document to bank under proper acknowledgement.

2. Yes, the bank will return the excess amount to the mortgagor/borrower,after deducting the remaining home loan.

3.Yes, the remaining amount will be returned to the account from which EMI were being paid basically depends on the mortgagor's wishes - How he wishes the remaining amount.

5. Yes, it will effect the credit rating of the borrower. When you are declared as NPA, you may not be given any further loan on the same bank.
Rutumbhara www.lawkonect.com 09555 507 507

SuperNuvos (Own)     21 January 2014

Thanks to you all for the very valuable piece of advice. Apologies for replying late on this thread as I have been unwell.

My dilemma is that my wife is threatening divorce and she seems to have malafide intention to grab a piece of house or perhaps the whole of it without paying single EMI. If there is legal court case, I will find it difficult to pay both for the legal fees for divorce as well as the EMI.

What should be done in this case?

Vijay (Executive)     25 July 2014

Dear Advocates,

please give me reference cases where reserve price has been set much lower than the amount disbursed as loan after valuation. The auction took place after 6 years of nonpayment of EMI. The loan disbursed was 10lacs and property auctioned (after 6 years) at 5.75 Lacs.

 

Bank is now behind me to pay the remaining amount to settle the due. Pl give me case references as this is a clear game of the banks 

K.K.Ganguly (Advocate)     26 July 2014

1. To solve your problem you shall have to be declared as the sole owner of the flat,

 

2. File an application before the civil court praying for declaration that you are the sole owner of the flat since you have paid and are paying the consideration for buying it and to direct the registrar to register the rectification of deed by making correction of title,

 

3. After you are declared as the sole owner of the flat, apply to the Bank to remove the name of your wife if she is the co-applicant of the loan,

 

4. If she is not the co-applicant of tha loan, then submit the rectified copy of the Deed and start paying the EMIs.

SuperNuvos (Own)     27 July 2014

Thanks for continous inputs from everyone

@ Mr. Ganguly,

  Your suggestion is the most logical piece of advice to follow...but what I am not clear is about the timeframe for the decision that the court would take to come at a conculsion.Can you please advise on it?

K.K.Ganguly (Advocate)     27 July 2014

1. No body can predict the time to be taken by the civil court in India to pass judgment,

 

2. It depends on the load on the Court and also how the opposite party (ies) is/are acting or reacting. It may take  2 to 5 years,

 

3. In any way you shall have to start the case since it is your only option,

 

4. Better start it immediately. 


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