I have taken a home loan. I lost my job some 4 months before and was unable to pay the home loan for 3 months and is just settling down with a new job where he joined a week before. Bank manager called me today and told that they will be taking the possession of the house soon without any notice. I can regularize the account from next month but bank manager not listening to me. They are asking him to pay in full to avoid taking possession. He has not got any notice as of now but they are telling that he will receive the notice soon. Any options ? Also he had to undergo lot of harassment when he defaulted. All details are officially there in records. Also there was a time when he wanted to close the loan, but bank didn't help that time providing the details for more than a month. After some time I lost the job and all these things happend . Kindly advise how to tackle this?
A bank's credit recovery policy is expected to conform to the following norms:-
(a) specify notice period before taking possession of security
(b) mention the procedure for taking possession of the security
(c) a provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the property
(d) the procedure for giving repossession to the borrower and
(e) the procedure for sale / auction of the property.

In the given case, you, the borrower should immediately mention in writing to the bank preferably through a lawyer that you are willing to settle the dues within a specified period (in a month as stated by him) and hence request the bank not to take any legal steps for recovery, like taking possession of the property.

In any case the bank has to take legal steps after serving sufficient notice to the borrower and can not arbitrarily take (or threaten to take) possession of the house.

In case you receive any legal notice, you will have to send a proper reply through a lawyer that you would clear all the dues within a specified period.

Views above are without any liability or commitment.
Our Experts

Sucheta Dalal Trustee - Moneylife Foundation

Abhay Datar Abhay Datar is a consumer activist. After working at Bank of Baroda for about 29 years, he retired as IT Manager. After retirement, Mr Datar joined Consumer Guidance Cell of Mumbai Grahak Panchayat (MGP) in 2008 and solved many cases related to banking including online fraudulent transactions, misuse of credit cards and ATM cards. Also handled cases related with mobile banking frauds and mediclaim. He was a Member of the Managing Committee of MGP till March 2021.

Suresh Prabhu Mr Prabhu retired as Senior Vice President from HDFC Bank

R Bhuvaneswari After serving Bank of Baroda for almost 40 years, Ms Bhuvaneshwari retired as Chief Manager in 2013.

Yogesh Sapkale Yogesh Sapkale is Deputy Editor of Moneylife and writes on finance, credit related issues

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