Tag Archives: Loan Advisory

RBI for central registry to check home loan frauds

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Reserve Bank of India, RBI, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyFraudsters will soon find it difficult to dupe banks by mortgaging the same property with two lenders or selling mortgaged property. Reserve Bank of India has announced the operationalisation of a central database that will contain details of all property against which loans have been advanced.

The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), a government company licensed under section 25 of the Companies Act-1956, has been incorporated to operate and maintain the Central Registry under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

R V Verma, Chairman and Managing director, National Housing Bank, has been given additional charge as the Registrar of the Central Registry for three months, and he will also be the managing director and CEO of CERSAI.

The central registry was seen as crucial for the effectiveness of the SARFAESI Act-the legislation enacted in 2002 to enable banks recover funds from loans that have gone bad. This is possible by either restructuring the loan or enforcing the security and selling the mortgaged asset. The Central Registry is also an important for the development of the home loan market as lenders can now be sure that the property offered as a security has a clear title.

The creation of the registry was announced by the finance minister in his Budget speech for 2011-12. Following the announcement, the finance ministry notified the establishment of the registry to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property.

RBI said that the registry became operational on March 31, 2011. Initially, transactions relating to the SARFAESI Act will be registered in the registry. Interestingly, unlike credit information bureau CIBIL, where borrower information is accessible only by lenders, the records maintained by the Central Registry will be available for search by any lender or any other person.

“Availability of such records would prevent frauds involving multiple lending against the security of same property as well as fraudulent sale of property without disclosing the security interest over such property,” RBI said. The SAFAESI Act requires that lenders file the particulars of any charge over any property within 30 days from the date of creation.

Banks reluctant to finance freelancers and contractors

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Track2Realty, Track2Media, Banks, India Real EstateMost banks lending for homes are only interested in providing mortgages to people who have a fixed annual or monthly salary and their important criteria for assessment is based upon the amount that is earned. The presumption is that only these people are capable of meeting their repayment options without default. This presumption in the mortgage industry is creating problems for contractors or freelance workers to obtain credit easily.

The credit lenders are reluctant to provide loans to contractors, mainly because they are afraid that there is no continuity of work. Without this continuity there is a risk that the client will default on the repayment and therefore their money will be at risk. There are some financial institutions who are willing to provide mortgages for contractors, but they can charge comparatively high rates of interest. These high standards and rates of interest prescribed for credit loan facilities put a big burden on contractors when it comes to finding finance. Even though the fact is that many self employed workers earn more money than some employed workers.

The main hurdles faced by the self employed when applying for credit is proving how much they earn. They also find it difficult to provide guarantees to prove that they will continue to receive this money in the future, which would obviously reduce the repayment risk. In order to avail mortgages for contractors, you first need to prove your employability, that is, the present work you are performing. They will also assess you on the basis of your past performance.

The bank or financial institution will assess your market reputation and the profile features of your clients, also your earning potential and your credit worthiness. These are all related to the future and have a certain level of uncertainty. Some banks do tend to exploit these problems and will offer mortgages but with much higher fees and processing charges, therefore compelling the borrower to pay very high rates of interest. The lending institutions justify this injustice on the basis of the risk involved in the repayment by the service providers. Hence special and difficult criteria are provided for mortgages for contractors.

But now the situation has changed and many lending institutions are coming forward to offer finance for contractors on a reasonable and standard rate of interest without spending much on processing fees. They have made the procedure much simpler so that there is no need to produce company accounts, or to take out overpriced loans in order to pay your mortgage.

Home loans for resident Indians

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Track2Media, Track2Realty, Home Loan Advice, India Real Estate NewsHome is the most integral part of an individual, who since his birth and childhood, dreams to have a living space of his own in India. Once in a lifetime investment requires loan to accomplish it, and that is how the home loans comes into the scheme of things.

Home loan for resident Indians are offered by the Housing Finance Companies (HFCs) which range from buying a house either from the developer – built, un-built or under construction or from a second owner or for the improvement and renovation of the existing building structure.

With the latest boom in the Real estate, and investment market in India, many venture capitalists are coming forward to have their share invested in so called rich dividend paying projects. And so has been the mushrooming of banks and financial institutions that are coming forward to offer to the customers a variety of deals to choose from.

With so many private sector banks, and private as well as public sector’s housing financing companies lending their shoulders out, it’s becoming gradually uneasy for the consumers to choose the best deal as well.

For an Indian resident to avail loans, certain factors including eligibility criteria, documentation need to be considered, and of course you must know about some Home Loan Tips before applying for Home Loan, which are discussed in this section, which includes eligibility, amount of loans, types of interest, tenure of interest, the documents required, rate of interest, and even disbursal of loans.