How to Stop Auction for Home When Borrower Lost Job?

How to Stop Auctioning for Home When Borrower Lost Job?

You do not have to face banks, NBFCs or recovery agents alone. A Loan Settlement Lawyer can review the terms of the loan, any notices you’ve received, the amount outstanding and where things stand with recovery before suggesting what professional response is warranted.

Advocate BK Singh specializes in ensuring borrowers understand their options before being strong armed into hasty financial or legal decisions. Options may include settlement, restructuring, repayment, representation to the lender or filing of suitable legal proceedings if allowed by law.

Why Does Job Loss Make a Home Loan Auction So Urgent?

Job loss may lead to a bona fide repayment crisis. However, the creditor’s security interest is not extinguished merely because the debtor becomes unemployed. If the property is mortgaged in favour of the bank and the account is under URC process, the bank would have statutory remedies to enforce its security interest under SARFAESI ACT. SARFAESI empowers the secured creditors to take certain enforcement actions bound by the said statute. Section 13 is about enforcement of security interest and Section 17 deals with providing remedy to a person aggrieved by actions taken under Section 13(4). Now the pertinent question that arises from a borrower’s point of view is not “Should I fight the bank?” It is :-

and this is where Loan Settlement Lawyer can help. This issue becomes acute for families residing in Delhi NCR, Noida, Ghaziabad, Greater Noida, Gurugram, Faridabad and other cities of India where majority of family wealth is tied up in the home. A home foreclosure can impact your home loan eligibility, family stability and overall housing security.

Borrowers looking for local assistance can also explore loan and EMI settlement legal services in Noida.

Quick Facts

You Might Have Questions About Stopping a Home Loan Auction

Stopping a Home Loan Auction does not mean FOREVER defeating the lender.

When people say stop the auction, it could mean different things. It could mean buying time to assess the account and work out a reasonable written settlement. It could mean fixing a problem with the recovery process. It could mean filing for appropriate legal relief if justified by the facts. Loan Settlement Lawyer will first help you figure out which applies in your case. For instance:

A may have recently been terminated and be facing a temporary shortfall of funds but expecting to be employed again. Mr. B may not have any immediate income and may need a different discussion around settlement. Mr. C may have received an auction notice where there are some questionable amounts, procedural defects or other facts that need legal review.

Every situation is unique.

You should therefore have the documents reviewed by a lawyer rather than being told there is a guaranteed solution because you lost your job.

Additional Questions about Home Loan Auctions

What law applies to stopping a home loan auction?

One law that applies to secured home loans is SARFAESI. Section 13 of SARFAESI Act talks about enforcement of security interest. Section 14 talks about how assistance from Chief Metropolitan Magistrate/ District Magistrate can be taken in possession under circumstances mentioned in the Act. Section 17 provides the borrower with statutory remedy before DRT against certain acts done under Section 13(4) while Section 18 provides appeal to Appellate Tribunal. The Security Interest (Enforcement) Rules, 2002 contain important procedures about notices and enforcement of secured assets. Some of these procedures relate to service of demand notice and procedure after service of such notices.

Why does this matter for stopping a home loan auction?

You should not assume that a phone call, bank letter, possession notice or auction notice by the bank all have equal meaning from a legal perspective. Loan Settlement Lawyer will examine the actual document that has been served and advise on the significance of that particular document.

Who should speak to Loan Settlement Lawyer about Home Loan Auctions?

Have you recently lost your job or source of income? If your salary was helping you pay the EMIs and that has suddenly stopped, the EMI which was affordable may now become due. It could be worthwhile to speak to someone early on about your options and understand whether you should consider settling or restructuring before your home loan account progresses further.

Have you received any Recovery Demand Notice? Don’t ignore the notice simply because you are unable to pay the money today. A Lawyer can look at the notice and loan documents and inform you what needs to be done.

Have you received any possession notice or auction notice on your home? If yes, it is particularly important you speak to someone early on about your options. Loan Settlement Lawyer can look at the notices and documents to determine if you should negotiate, be represented or file for an appropriate legal remedy.

Are you receiving recovery calls frequently? RBI has instructed all banks and financial institutions not to engage in intimidation or harassment during recovery. Recent RBI instructions also specifically refer to excessive phone calls or harassment through calls at odd hours like before 8 am or after 7 pm for recovery of loans.

Irrespective of whether banks can’t engage in such conduct, it doesn’t mean the loan gets waived away. It does however mean you can speak to someone about what constitutes acceptable recovery calls and what you can do about threats and excessive calls.

Why Hire Loan Settlement Lawyer after you lost your job?

Don’t just hire a lawyer because you need someone who will send legal letters to the bank. Take control of your finances by first understanding what you should do. Loan Settlement Lawyer will look at your loan agreement, history of repayment, notices issued by bank, loan documents and security, and what stage of recovery has been reached.

BK Singh can explain to you if it makes sense to talk to the bank about settling the loan, if the loan can be restructured, if you need to respond to what bank said in writing or if you need to explore a legal remedy to protect your rights.

Without professional advice you may act impulsively. One day you might tell the recovery agent that you will pay the full amount next week. Next day you might pledge your wife’s jewellery with a relative to get money. Later you will find out that none of these actions stop the bank from taking action against you.

Hiring an Advocate to represent you ensures all communication can go through one channel. It also allows you to discuss your financial issues with someone who can explain banking terms, loan documents and legal language.

For general information about borrower safeguards and recovery-related rights, see Borrower Protection & Rights.

Documents to gather when you cannot pay your home loan due to job loss

Please provide all documents mentioned below. Having all these documents will allow BK Singh to quickly understand your situation.

• Copy of home loan sanction letter/agreement
• Loan account statement as of date
• Copy of EMI payment history
• Any correspondence from bank/ emails regarding your loan
• Copy of Demand/ recall notice if received.
• Copy of Notice of Possession, if received.
• Copy of Auction Notice, if issued.
• Original mortgage deed/ pgehat/ security document
• Salary slips indicating salary you earned before losing job.
• Employment termination letter or any document related to loss of job.
• Any document that shows current income or likely employment.
• If you had previously settled or restructured your loan, please provide those documents as well.

Hiring Loan Settlement Lawyer to stop a Home Loan auction

When to hire Loan Settlement lawyer?

You can always speak to Loan Settlement lawyer after missing one EMI. Every person’s situation is unique and there is no hard and fast rule about when you need to hire a lawyer.

It makes sense to speak to a lawyer when:

• You have lost your source of income and have defaulted on multiple EMIs.
• The bank has issued you a Demand/ recovery notice.
• The bank has issued a possession notice against your home.
• You have received an auction notice.
• You believe the bank has figures on your loan account that are incorrect.
• Recovery agents have been acting aggressively towards you or your family.
• You previously tried to settle with the bank but the bank refused.
• You are looking to sell some assets to pay off your loan.
• Your home is at stake.
• You simply do not understand what the latest notice from bank means.

Just because you speak to a lawyer does not mean an auction will be stopped. However it does mean you will understand the situation before making a financial decision that you might later regret.

Frequently Asked Questions

Final Words

Missing your job and EMI can change your regular home loan into a distressing family matter. It is best not to panic and immediately judge your options.

If your home loan account has received legal notices for recovery or is in the process of property auction, get your documents reviewed by an expert. Loan Settlement Lawyer will help you understand the notices, go over available legal options and speak to your lender in a calmer, systematic manner.

Advocate BK Singh offers legal help to borrowers in Delhi NCR and other regions of India. We focus on reading your documents and advising you on practical and legal solutions permitted by law.

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