Buying a Home through Home Loans is the norm of the Day.
Days are past when being a Debtor was considered a Sin and attracted social ostracism.
Now if you do not have a Credit card or Loan EMI, you do not belong to the uppity group.
Now that you have availed of Home Loan, it is prudent to know what action to take in case of unforeseen default.
EMI Default Points, Home Loans.
1.Temporary problem in Repayment of EMI.
This might arise due to unexpected loss of job or expenses incurred in the Family due to Death, Illnesses.
In these cases represent the cases to the Lender the details in writing and request them for a minimum break from payment of EMI.
This may not be possible,
However ,depending on your credit rating, the managers may use their discretion in granting you relief.
This also may not be enough.
Make sure , if this request is granted, to stick to accepted schedule of payment.
You may also request them for a reduced EMIs at longer period of repayment.
This may be considered favorably ;this depends on your credit rating, qualifications company you work for or the number of years you have served in a company.
2.Permanent Failure to pay EMI.
You have no other option but to ask the Creditor to realize the mortgage and debit your account the balance if any.
Handling Collection Agents.
Inform th Collection Agent the position and confirm the details in writing to the Creditor.
Do not use abusive language.
In case the Collection Agents behave rudely including use of abusive language, report to the Link provided here below.
RBI is very clear on this.
“Lenders are willing to negotiate
Attaching a property is the last thing a lender wants to do. Though banks have the power to enforce the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFAESI) to recover non-performing assets without the intervention of a court of law, this is the last step they prefer to take. A bank usually lets one mortgage payment default slip by, but for the next one, it will mail you a reminder to inform you that your payments are late. After three defaults, the bank will send a demand notice, asking you to pay your dues as soon as possible.
“If the borrower doesn’t respond to any of the mails, the bank sends a legal notice through its legal department,” says VN Kulkarni, chief counsellor at Abhay Credit Counselling Centre, which is sponsored by the Bank of India. A bank waits for three months before declaring an asset a non-performing one. “After the end of this period, the bank can officially term thehome loan an NPA and start the process of recovering the property through the SARFAESI Act,” says Kulkarni. Even after invoking the Act, the bank gives the borrower a 2-month notice period to repay the dues.
“Finally, five months after the first default, the bank sends a notice, stating that it has valued the property for a certain sum and that it will auction the house on a particular date. This is usually set for a month from the date that the bank mails you the auction notice,” adds Kulkarni.
On Collection Agents.
http://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=4141
3. The bank would respect privacy of its borrowers.
4. The bank is committed to ensure that all written and verbal communication with its
borrowers will be in simple business language and bank will adopt civil manners
for interaction with borrowers.
5. Normally the bank’s representatives will contact the borrower between 0700 hrs
and 1900 hrs, unless the special circumstance of his/her business or occupation
requires the bank to contact at a different time.
6. Borrower’s requests to avoid calls at a particular time or at a particular place
would be honoured as far as possible.
7. The bank will document the efforts made for the recovery of dues and the copies
of communication sent to customers, if any, will be kept on record.
8. Inappropriate occasions such as bereavement in the family or such other
calamitous occasions will be avoided for making calls/visits to collect dues.
3. Giving notice to borrowers
While written communications, telephonic reminders or visits by the bank’s
representatives to the borrowers place or residence will be used as loan follow up
measures, the bank will not initiate any legal or other recovery measures including
repossession of the security without giving due notice in writing. Any genuine
difficulties expressed/disputes raised by the customer will be considered by the banks
before initiating recovery measures. Bank will follow all such procedures as required
under law for recovery/repossession of security.
Still you have problems report to Consumer Forums.
Plese read my blog posts filed under consumer forum.
