Reply to SARFAESI Sale Notice for Home

Why Sale Notice Stage Is Important To Take Reply Seriously in 20-26

Sale notice is a public declaration that bank is inviting auction offers on secured property. Borrower’s reply after sale notice needs to be stronger than a normal settlement request or time-seeking application.

Many borrowers send emails saying “stop auction”. Legal reply to bank sale notice after SARFAESI should include those questions too. Was bank following mandatory SARFAESI process? Is reserve price reasonable? Is property description accurate? Was notice served properly? Has borrower’s objection or settlement offer been ignored?

I usually explain the law very simply. After receiving sale notice, the borrower must respond with proper legal document. Oral discussions are about making payments. But bank sale notice requires documented legal response.

What Is Most Important Fact After Receiving Sale Notice?

Most important fact after sale notice is – Can borrower legally object bank’s sale process and request more time to repay loan?

Merely saying “I am in financial trouble” is not a strong reply to bank sale notice. You can tell bank about hardship. But legal notice reply should also tackle technical issues like wrongful bank process, improper service, unreasonable reserve price and so on. DRTs and Courts see documents, dates and compliance before hearing borrowers.

Generally I review all loan documents including demand notice, possession notice, valuation, loan account statement, sale notice, bank’s reply and service proof before advising borrowers on proper reply.

Loan Against Property SARFAESI Act Legal Process

Loan against property defaults are covered under SARFAESI Act, 2002. Sections 13, 13(2), 13(3A), 13(4) read with Rules 8 and 9 are more applicable after mortgage property is sold under SARFAESI.

Here important things to know about loan defaults under SARFAESI Act:

• SARFAESI stands for Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
• Under SARFAESI Act, banks can’t take your home without giving you notice. Secured creditors must follow due process.
• Bank is required to serve Section 13(2) demand notice giving borrower 60 days time to repay loan. But if you send written reply, timeline changes.
• Upon receiving objection from borrower, bank must consider objection and reply under Section 13(3A).
• If bank ignores borrower reply and sells property, borrower may approach Debt Recovery Tribunal or DRT under Section 17.
• Strict timelines and procedures are laid out in SARFAESI Act for banks seeking to sell home under mortgage.

Who Should Read This Guide on SARFAESI Sale Notice?

Any borrower, guarantor, co-applicant or family facing home mortgage sale under SARFAESI must read this guide. It will help you understand how to legally respond to bank sale notice.

It also applies to all borrowers receiving e-auction notices, physical possession notices, symbolic possession warnings, valuation letters, sale advertisements or illegal threats of bank intent to sell house.

Lawyer Advocate BK Singh has even helped clients whose loan was being settled with bank but sale notice was wrongly issued. In such cases, borrower must refer to history of written settlement requests and not rely on verbal discussions alone.

What Topics Must Be Covered In Reply After Sale Notice?

Loan account, property details and specifics of sale notice must be mentioned. Then borrower can state objections and requests.

Loan account statement errors, inaccurate dues, non-consideration of earlier reply sent by borrower, deficiencies in property valuation and sale process, unrealistically low reserve price, improper notice service, incorrect property description, pending loan settlement amount, medical or financial distress and request to postpone auction are typical issues borrowers raise after sale notice.

In most cases I keep borrower reply simple, but firm. Borrowers sometimes send rude emails to bank without proof. That reflects poorly on borrower. Remember, bank sale notice reply is your chance to make legal record.

Timeline Between Loan Default & Loan Sale Notice Issued

Each date in loan sale process timeline is important. Borrower must work backwards from sale date mentioned on bank’s sale notice to find out:

• Date of auction
• Date of sale notice publication
• Date of bank taking possession
• Dates of previous SARFAESI notices like demand notice, possession notice and so on.

Written reply to bank may slow things down, but if auction is fast approaching borrower must go to DRT. Time is important because filing at DRT becomes available only after bank takes measure under Section 13(4). Borrowers think replying to sale notice will stop auction automatically. But do not rely on it.

Generally I recommend borrowers to consult me at the earliest when sale notice is received. Sometimes people wait for last few days to act. By that time their options become limited.

Conclusion…

Readers must understand that Sale notice issued under SARFAESI Act is a legal ‘ULTIMATUM’. Do not rely upon phone calls, sympathy or promises to make payment at the last minute.

RESPONSE to SARFAESI NOTICE FOR PROPERTY after Sale notice issued Should BE…

Quick, Supported by EVIDENCE, Legal Format and Well documented.