Tabs (Manager) 30 June 2011

Removing Co-Applicant Name

Hi,

My sister is the co-applicant in home loan for a property(Apartment) from LIC.

The Co-applicant name needs to be removed from the Home loan as the couple has got separated, My sister doesnt want any share from the flat. She is ready to transfer it to her husband.

When we went to LIC, they said, the loan needs to be closed for this .

What is the process of getting this done? Some one suggested a release deed, Is release deed engouh, will this remove her name from property and home loan? He wants to apply for another loan for a property, she wont be eligible if this loans appears to be in her name.

Can you please advise, what can be done here, her name needs to be removed from property and loan.

Rgds,

Tab

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4 Replies

Bharatkumar (ADVOCATE ) 30 June 2011

First u take a NOC from Bank / LIC for remove your sister name and then u registred a relse deed and your sister has relese1/2 share in your favour. She has not transfer her 1/2 share without your concent or Bank / LIC concent.

piyush sharma (Lawyer) 30 June 2011

Your sister and her ex-husband had taken a loan. The Loan must had been given after taking into account of combined income of both (assumption). How can now LIC release you from your liablity when the loan has been give after considering your income also. I dont think LIC will do that as the same will increase there risk of default. My suggestion in that your sister should execute an internal agreement with her husband stating that the husband will make payment on behalf on her in exchange she will execute the sale deed in favour of her ex husband. It can also be in form of an seperation agreement. I do not suggest you release deed as the same release the title of the your sister but not her liability. However above suggestion may be an escape route for your sister but I am not very sure that will that allow her to take further loan and therefore kindly take advice from the bank where your sister want to appy for the loan. For further clarfication kindly mail me on piyushsharma@lawyer.com

Kumar Doab (FIN) 30 June 2011

If funds are not the issue, then the matter can be resolved by settling the loan, and removing the name of lady from loan and property.

Banks take over the loan and charge app. 2% charge of the amount taken over.

You can explore this option from nationalized and private banks and compare for the best deal.

Procure an a/c statement of loan a/c from LIC showing the balance amount to be paid.

Approach any other bank of your choice, with all details and all documents and confirm the process of takeover with one gentleman applicant only, and the lady shall discharge her liability with LIC.

If the bank agrees, discharge the liability with LIC, obtain NOC from LIC, and ask the LIC to report it to credit rating agencies e.g. CIBIL, and apply for CIBIL report to LIC. RBI has fixed a fee up to maximum amount of Rs. 50/-

Bank shall grant loan as per their eligibility criteria, and looking into income of gentleman.

Since the lady does not want any share from the property, husband should not have any issues. Hence settle the loan with LIC, and explore the suitable and desirable options.

Banks accept co applicant from, parent, spouse, brother, direct relative...or a guarantor.

Elders in the family, competent and experience persons known to the family, lawyer can help to resolve the matter amicably.

Gentleman if has liquid funds can show it to the bank, or can apply for lower amount from the bank or can apply a loan/potion of the loan, against FD.