(Guest)

Need urgent help

Dear Sir,

My father is a retired senior PSU executive who applied for a reverse mortgage loan with IDBI Ltd. As on date their is nothing outstanding on the property except the current ongoing home loan with HDFC.As discussed with the IDBI bank people it was assured that bank would clear off the remaining outstanding in the name of the property to be mortgaged with the sanctioned RML Amount.All the legal and technical(valuation) was done at my father's cost satisfactorily.
Unfortunately now the bank people say that his cibil investigation shows some delay in payment of EMI'S Which makes the asset stressed and disqualified for RML.
The questions which are bothering me are-
1)He was never a defaulter of any financial lending institution.
2)Apart from certain delays in payment of EMI's in respect of the home loan due to stressed finances at his end, its still paid regularly and the asset is not in NPA category.
3)There are no outstanding dues against the property.
4) As understood & discussed with professionals, the “Reverse Mortgage loan “ is not to be treated as a normal Loan against Property where EMI credibility/ Credit worthiness of the borrower is to be ascertained by the bank thru CIBIL report investigations. Here the property is reverse mortgaged to the bank by the beneficiary (Sr. Citizen) who has no source to finance his pressing family needs. I have even studied the National Housing Bank (NHB) guidelines for RML.

I understand that CIBIL score has no role to play in this case as the borrower opts for this only when he has no means of earning for meeting EMI burden. The question of credibility limits only to the extent that the deed is clear .

As far as I understand the basic intention with which the Government of India launched this “RML Product” under the National Housing Bank Guidelines ,was with the prime motive of helping the aged and the needy senior citizens to lead a life of dignity in their golden years of life when they have no one to support and no source of stable income left, thereby utilizing the equity of their self- owned and occupied residential property to come to their rescue.
It’s not a regular home loan transfer from one bank to another bank or a equity based mortgage where the borrower has to pay regular monthly installments to the bank, that the question of my father's residential property being called a ‘stressed asset” comes in to picture. Here the borrower throughout his life doesn’t have to service the loan and hence requirement of seeing past credit history has no relevance at all.

I would be grateful if you can guide me thru...and advice me appropriately that what he can do to claim his justified right of getting the loan.

Regds

Rashmi Upadhyaya
LL.B (Final Yr)
CS (Executive)

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2 Replies

ROHIT SHARMA (Legal Advisor ) 04 May 2014

Dear Ms. Rashmi Upadhaya,

1. You see the relevant fact that E.M.I.is being paid as towards purchase of such property in context denotes that the said property is mortgaged to H.D.F.C.

2. Now, seeking a R.M.L. with IDBI will too need to have such property too would require the property to be mortgaged.

3. In commercial law there can be two mortgages on the same property by two different creditors.

4. Now if the housing loan amount due to H.D.F.C. is less than the R.M.L given by IDBI then both such creditors can have a lien of mortgaged marked on such same property at the same time.

5. I do not think CRSIl ratings are required for R.M.L.

6. Go for R.M.L. with another bankers if IDBI is not understanding this fact that there can be two creditors having mortgage on the same property of a loanee.

(Guest)

Thanks a lot Rohit Sharma Sir..for the prompt reply to my query..Here i would like to make some further clarifications. The property to be mortgaged is currently with the HDFC bank as some Home loan amount is still outstanding. My father dont wish to have two separate lien on the same property. what he intended and suggested to the IDBI bank was the closure of the outstanding balance against the sanctioned RML amount and get the legal deed with them.

Here i would like to add on ,that as per National housing bank guidelines for reverse mortgage loans there are two criteria which a borrower has to qualify before applying:-

1) He should be a senior citizen above 60 yrs of age

2) He should have a clear title of the property in his name free from all encumbrances.

Now since the HDFC home loan still subsist..that means still the legal title is not with my father till loan completion. That s why he suggested the simultaneous closure of the home loan by the other bank (IDBI)along with the handing over (transfer)of the original title deed post payment to the IDBI.

The remaining balance of the sanctioned RML amount after closure of HDFC home loan will be given to the borrower(my father). that means there will be no two mortgages on the property but only one..that will be IDBI with respect to RML.

It is with respect to the closure formality that the IDBI bank is raising objections quoting CIBIL thing which makes no sense as RML is not like a regular home loan. NO EMI'S are required to be paid till the loan completion tenor after which also the legal heirs are given a discretion to pay the (principal+interest) amount lest the property goes for auction sale.

Had it been a normal housing loan or a takeover of home loan by other bank, then i would have understoo;.but for Reverse Mortgage loan where the borrower hands over the equity right at the beginning to the bank, raising objections over credit worthiness of the borrower is not logical.

Sir will it be appropriate to take the matter to the top management of the Bank for a internal policy

reconsideration or is their any remedy under the court of law to assert our genuine claim?

Changing bank is what i think is not the real remedy because enough of time and money is wasted over it already..Moreover most of the nationalised banks have somewhat the same thinking. The reverse mortgage loan is a new product in India & not much publicized one. So there is gross ignorance among the people & even the bank officials at the regional level about it and they treat it as a normal loan against property . And if the law of the land has any remedy for us..why not to avail.?

That's what i sincerely think.Being myself going to be a part of this "coveted Legal profession", shortly, I strongly believe one should fight for his/her genuine rights.

Warm Regds