make an application to housing finance to reschedule your loan to reduce amount payable per month and increase the number of installments

2) if you fail to make payment notice will be sent to the borrower u/s 13(2) of the SARFAESI Act. This can be done only after the loan is classified as NPA as per the guidelines set by RBI

3) The customer will be allowed 60 days post issuance of the notice to regularize the account or come forward to settle the account. .

4) If the borrower refuses to pay,then the authorized officer will ask for the physical possession of the mortgaged property by handing over the demand possession notice to the borrower

5) The Bank shall proceed with the auction of the attached property post 30 days of taking possession of the property, in the event, that the customer does not come forward and settle the loan. The Bank shall send the customer a letter intimating him, of the venue of the sale indicating date and time of the same.

6) The bank will consider handing over possession of property to the borrower any time after repossession and before concluding sale transaction of the property, provided the bank dues are cleared in full.

The financier or the financial institution may resort to legal action for recovery under sarfesi act if the loan is declared as NPA.

A non performing asset (NPA) is a loan or an advance where;

interest and/ or installment of principal remain overdue for a period of more than 90 days in respect of a term loan.

It is mandatory by the Banks to follow the RBI guidelines on asset classification before any account can be classified as an NPA and any irregularity in this regard can be fatal and can nullify the proceedings initiated under the SARFAESI Act.

Section 13 of the Act gives power to the secured creditor even to evict the tenant.

Temporary deficiencies like late/ non-submission of stock statements or balance outstanding exceeding the drawing power, non-renewal of limits should not get categorised as NPA.

If the borrower does not pay three instalments continuously after 90 days but up to 12 months the account becomes sub-standard and NPA. Section 13 (2) empowers the Bank/ FI to serve a notice to the borrower for taking possession of the assets held as security for the money lent by it. But there is precursor to this action: the Bank/FI shall serve notice to the borrower to discharge his full liabilities within 60 days from the date of notice that should also detail out the legal consequences and penal provisions.

Going by these two directions under the Act, the borrower should be getting at least 17 months’ time before the Bank could proceed against the defaulter.

You can talk to the institution for restructuring the loan or to allow you some more time to enable you to clear the entire loan as you await payment by a buyer shortly.

Please note that the bank may classify you as a wilful defaulter too. As per RBI guidelines:

If the borrower becomes a ‘wilful defaulter’ as defined by the RBI Master Circular on wilful defaulters vide RBI circular (RBI/2014-15/73 DBR.No.CID.BC.57/20.16.003/2014-15 dated July 1, 2015) SARFAESI Act proceeding can be issued even without notice to the borrower.

1.Since the property is mortgaged you can not sell the same without the approval of the Fiance company.

2. If you are not getting proper buyer then you can ask the LICHFL to auction the proeprty and recover the loan amount.

3.If you wait for sometime and bargain with the LICHFL on this they would certainly give you more time to get a buyer.

4.In any event it will take time for them to complete the legal proceeding and attach the proeprty.

1. You have taken loan by mortgaging your property which you shall have to repay with agreed rate of interest.

2. If you can not pay, the Bank will initiate SARFAESI Proceedings and issue Demand and Possession notice to you and thereafter will take physical possession of your mortgaged property.

3. After taking physical possession of your mortgaged property, the Bank will sell it off to realise their dues standing in your name and will return the excess amount collected while selling the property, if any.

4. After getting the Demand Notice u/s13(2) of the SARFAESI Act, negotiate with the Bank for one time settlement by paying an amount less than the outstanding, if possible.

5. If the Bank refuses to agree or if you can not pay anything at all, ask the Bank to sell it off to realise the dues and return you the excess amount if collected by selling your said mortgaged property.