 |
| Auction of your Home |
The procedure
If the borrower cannot repay the mortgaged payment, the bank sends
a Notice of Default. If the borrower does not respond by the specified date,
the bank takes legal action to recover the loan amount due.
According to the laws created to safeguard lenders, a bank or any
lending organisation can seize the property of the person who is unable to
repay the loan on that property. The bank does not need to go to a court to
claim the property because they are lawfully allowed to do so
themselves.
The rights of the borrower
A person availing a loan is also entitled to some rights. The
Consumer Credit Protection Act allows the borrower to take action against
unfair loan repayment calls or excessive and repetitive pressures. The loan
providers can call you only at a specified time and you have the full right to
modify a loan under specific conditions.
Auction of the property
Once the property is seized by the bank, they arrange to auction
it. First, they find out the real market value of the property. Next, they
determine a value for the minimum auction price, which is 15-20% lower than the
market price. The price rises with the bid offers from the buyers.
Points for a buyer to consider before auctioning
Auction date
If you want to buy a property in auction, keep an eye on the
newspapers for details such as the date of the auction, price and
location of the auction.
Online auctions
Sometimes, a lender arranges an online auction for a property.
This allows them to reach a large number of buyers.
The legal aspects
Hire a lawyer to get acquainted with all the legal terms and
conditions. You will also be charged a fee to inspect the property.
Check records
Contact
the municipal corporation and enquire about the legal aspects and tax issues
related to the property. Check if it is indeed safe for you to buy that
property.
