How Can Borrowers Seek Relief From Home Loan Auction During Medical Emergencies?
Medical problems are one of many stressful reasons for defaulting on your home loan. Any major illness can cause someone to lose their sources of income. Whether it's hospital stays, sickness or unexpected bills from a family member's illness, your life can be thrown upside down making it hard to make your EMI payments on time.
Receiving your home loan auction notice is scary and you may feel as if you are about to lose your home and that you have no other options. However, it isn't always that cut and dry. Yes, the bank can recover the money owed to them, but there are things you can do too. You can present your situation to your bank/lender and dispute their claims, negotiate with them or take other courses of action depending on your situation.
A Home Loan Auction Relief lawyer will be able to let you know how serious home loan auctions are. They will go over all of your notices and documents to determine what options you may have.
Medical purposes are a benefit to you when explaining your situation to your lender. They understand that life happens and expect you to be forthright with them when it comes to your loan. If you hire a lawyer to help with your home loan auction relief they will be able to speak on your behalf or present your case directly to your bank/lender.
Many people don't speak to a lawyer until they are about the undergo a home loan auction. Don't wait that long. Consult a lawyer to see what options you may have.
Why Does Home Loan Auction During Medical Emergency Require Immediate Attention?
Home loan recovery related issues come into play when you have been served notices under SARFAESI Act, 2002 or received communication on possession/ auction proceedings.
Medical emergency can affect an individual’s income/ability to mobilize funds or reply to lenders’ notices within prescribed time. Usually, families dealing with medical emergency tend to miss out on important timelines in recovery process while focussing on treatment expenses.
We have encountered such cases with many home buyers in Delhi NCR, Ghaziabad, Noida, Gurugram, Faridabad and other cities where borrowers have faced problems due to unexpected medical emergencies resulting into loss of job or insufficient income during treatment of a family member.
If you are a borrower facing such a crisis, it’s important to understand that auction process involves several legal stages. Questions with respect to validity of notices served, compliance to statutory requirements, process of valuation, conduct of sale and correspondence would arise based on facts.
Quick Facts About Home Loan Auction and Medical Hardship
- Foreclosure is not an overnight process when it comes to home loan.
- Banks generally have an in-house recovery process before they go for selling properties against loans.
- SARFAESI can be initiated only when the secured loan is tagged as NPAS.
- Borrowers are entitled to allow lenders about the financial distress they are in and the medical illness they are suffering from.
- Auctions have to be legally compliant.
- Depends on the documents, notices, facts of the case each borrower has different remedies available.
What Is the Legal Position When a Home Loan Borrower Faces Medical Problems?
Home loan auction means sale of property which was hypothecated/ mortgaged to bank for home loan by the borrower. Auction is a mode of selling the property by the lender for recovery of dues after following the laid down procedure for recovery. In case of secured loans, the lender can initiate SARFAESI Act, 2002 proceedings only after the account is declared in specified category of default. Generally it involves issuance of demand notice, opportunity to borrower to respond, possession/ consequential actions and auction.
Medical emergency doesn’t erase the responsibility of the borrower to repay the debt. However it can be considered for prayer of relief where you request leniency from the lender or as supporting detail on a legal challenge. Facts.
More importantly, a borrower should know the difference between:
- Submitting a request for loan settlement/restructuring is effectively a commercial negotiation with the lender.
- Filing a legal challenge is dependent on violations, inconsistencies or available legal recourse.
- Submitting Hardship letter outlining the borrower’s true financial hardship and facts surrounding that hardship.
A Loan Settlement Attorney can help you determine if your situation is eligible for help with negotiation, document review or litigation.
Which Laws Apply to Home Loan Auction Proceedings in India?
Typically Home loan recovery problems are Banking law problem and will fall under Secured creditor enforcement law. Following are the enactments which would be applicable:-
SARFAESI allows the secured creditor to enforce his security interest without the intervention of Civil Court. The borrower has certain remedies against actions by secured creditors under certain situations.
Rules pertaining to requirements regarding possession, valuation, notices, mode of sale etc.
Cause of action before Debt Recovery Tribunal against the bank under Section 17 of SARFAESI Act by a borrower aggrieved by action taken under SARFAESI Act, is also available subject to facts of the case satisfying legal requirements.
Keep in mind that the above remedy would differ depending on the stage of the proceedings, documents in your possession and what exactly the bank has done.
Who Can Seek Guidance During a Medical Emergency Related to Home Loan Default?
Common scenarios where we usually encounter this issue:
- Owning a home and a loved one becomes seriously ill.
- Family member whose bread winner was injured or became ill.
- Borrower who had a temporary setback because of medical expenses.
- Retirees that cannot make payments after a sudden illness.
- Business owners where there income was cut due to illness or injury.
- Often the borrower is emotionally distressed wondering if speaking with the bank will make it worse or if they should just wait for a lawsuit to come.
When you receive any notices, bank begins a possession action, see your property for sale in the auction pub, or do not understand what your lender is saying. It's time to talk to a professional.
What Steps Can Borrowers Consider Before Home Loan Auction?
Generally speaking, this situation develops over time. You might initially receive bills. You may later receive recovery notices if the account continues to be delinquent.
At this stage your medical documents, proof of income, payment history and correspondence with the lender will matter. If you have maintained good records you will be able to establish a genuine case for financial distress.
You could consider sending a professionally drafted letter to the lender explaining your medical situation and asking for a reasonable workout. This will depend on the policy of the lender and the specific facts involved.
If recovery actions have already been started, your paperwork becomes extremely important. Go through all the notices, possession documents, valuation report, auction related documents etc.A Loan Settlement Attorney would be able to assist you in determining if your situation is negotiable, open for discussion or can be challenged legally.
Documents Required for Reviewing Home Loan Auction Issues
Following are some of the documents which you might require:
- Home loan loan agreement and sanction letter.
- Loan account statements.
- EMI details.
- Any Notice/ recovery type letters from bank.
- SARFAESI notices(if any).
- Auction notice/ publisher.
- Medical report/ hospitalization details.
- Proof of income/ documents which show financial difficulties faced by you.
- Property related documents.
- Any previous correspondence with bank.
Documents establish a very strong role which defines you legally.
When Should a Borrower Consult a Lawyer?
You may think of consulting a Lawyer:
- When you get a SARFAESI notice.
- When the borrower gets possession notices.
- When Auction process has started.
- When the bank or financial institution is not agreeing to hear hardship plea.
- If there are issues with notice sent, valuation done or sale process followed.
- When borrower wants to know about negotiation options.
Loan Settlement Lawyer Advocate BK Singh can go through the facts, documents and stage of recovery to make borrowers aware of their legal position and options.
How Can Loan Settlement Lawyer Help Borrowers Facing Home Loan Auction?
Loan Settlement Lawyer can assist you to analyze your loan recovery situation you are facing, decipher what your lender means when he talks, draft appropriate representation and understand settlement negotiations.
Loan Settlement Lawyer, Advocate BK Singh listens to you, understand the borrowers financial position, documents available with you and the legal position you are in. We then advise you the right course of action based on facts.Do you require professional assistance with stressful recovery situations on home loan? Loan Settlement Lawyers helps borrowers across Delhi NCR and India.
Frequently Asked Questions
1. Can medical emergency prevent home loan auction in India?
Medical emergency is not a ground to automatically halt auction. Borrower’s financial distress, medical records and facts of the case may be evaluated in the context of exploring legal remedies or settlement options.
2. What can I do if my home loan property is put up for auction and I am sick?
Upon receiving the notice a borrower may read it carefully, gather important documents such as medical records, loan account details and speak to a Lawyer to know their options early on in the recovery process.
3. Can bank auction property without notice?
As per the applicable law, a bank or financial institution should adhere to certain prescribed procedure before auctioning a property. Required notices, time periods, valuation and sale related formalities should generally be complied with under the SARFAESI recovery process.
4. Does doctor’s payment help in settling home loan dues?
Yes. Facts such as medical expenses incurred and resulting financial hardship can be brought to the lenders’ attention as part of the surrounding circumstances when attempting settlement. The decision ultimately rests at the lenders’ discretion and facts of the borrower’s situation.
5. How can a Loan Settlement Lawyer assist if you are facing home loan recovery?
Consulting a Loan Settlement Lawyer can help you assess loan agreements, notice received from bank, financial conditions, explore possibilities of settling the loan and explain any legal issues or represent you as per your requirements.
6. Can home loan auction be stopped?
Yes. If there are valid legal grounds to challenge the auction process such as procedural deficiencies, improper notices, wrongful valuation etc. a borrower may be entitled to remedies which are dependent on the facts and stage of the process.
7. What documents should be shared for review of home loan auction relief?
Loan documents, notices received from bank, account repayment history, medical records, income evidence, property title documents and any correspondence with bank.
8. Should we meet a lawyer before the home loan auction date?
Yes. Speaking to a lawyer early on can help you understand your situation better based on the facts and help review important documents. Further your options can be discussed to understand what can be done in the time available.
9. Senior Citizens are facing problem due to medical reasons… Can they seek any special relief against auction of house?
Senior citizens or borrowers who are facing medical hardships are allowed to explain their situation to the lender and request for consideration under the relevant circumstances. All facts and documents would be considered by the lender as per the applicable legal framework.
10. What if I don’t respond to notices for home loan auction?
Not responding to auction notices can jeopardize a borrower’s chances of receiving ample time to react or take suitable action. Legal Notice Requirements should be understood and adequate advice should be sought.
Final Thoughts
Family suffering from medical emergencies are always under tremendous financial and mental stress. What could be worse than auction sale of your home? Auction Sale of house due to home loan requires careful treading as each step can have legal & practical consequences.
Medical hardships faced by borrower does not necessarily mean that auction sale is a foregone conclusion. It also doesn’t mean that your hardship automatically qualifies you for loan relief. Borrowers should be wary about everything – read all documents, meet all timelines and know your legal standing.Consult Loan Settlement Expert Advocate BK Singh for any home loan recovery related queries, negotiations and legal issues.
