Skip to main content

Central registry of mortgaged houses

In case of home loans, banks are entitled to mortgage of the property. The mortgage is normally either in the form of equitable mortgage or deposit of title deeds. The mortgage deed is not registered or noted in the records of any revenue authority. As such, the mortgage details are not reflected in revenue records. As a result, the encumbrance certificate issued by a subregistrar will not be able to highlight an existing mortgage. Moreover, the search certificate issued by an advocate won't be able to include this either.


   One of the major reasons behind bad loans in mortgages is cases where a borrower takes a loan from more than one lender using duplicate documents. Sometimes, loans are taken for the same property from different sources, using duplicate documents.


   The National Housing Bank (NHB) and the Credit Information Bureau of India Ltd (CIBIL) have joined hands to set up a central registry of mortgaged houses. Home loan defaults are expected to drop sharply with this move.


   The repository was set up with a database of around six lakhs borrowal accounts compiled from 25 entities commercial banks and housing finance companies - and is expected to help lenders take an informed lending decision. The database accounts for a significant chunk of loan accounts in the country. Presently, the CIBIL database is accessible to only member organisations.


   According to the Reserve Bank of India (RBI) database, there were around 5.7 million borrowal accounts with commercial banks in the country as on March 2009. With the increase in defaults in the housing sector due to duplicate sales deeds etc, CIBIL's mortgage check will enable more informed decisions while assessing new mortgage loan applications as well as better portfolio management. The comprehensive reference database will contain information on properties that owners have availed loans on, summaries of those loans, and open and close dates. The move is a part of the initiative to improve infrastructure in the housing finance market. As the home loan market evolves, there is a need to create appropriate infrastructure.


   The NHB is also pushing for mandatory registration of equitable mortgages. This would increase the cost of home loans as lenders would have to pay a stamp duty which is related to the property value. The stamp duty is in turn recovered from the borrower. The NHB is also working with 10 major banks in the country to set up a central mortgage repository which will have electronic registration of mortgages, and will be mandatory for everybody.


   Now, CIBIL has introduced mortgage check, in association with NHB. The mortgage check will contain information on property mortgaged to various banks, and details of existing loans and comprehensive information on such property. Mortgage check is an electronic database posted on the website of CIBIL.

 

Authorised persons from member organisations (banks) will be able to access the database to check a property for which loan is applied for. This will help lenders share and access mortgage information and contain bad transactions. In case the details of the property match with the database, the loan application will be declined.


   This will help both the buyer and the lender as it would enable detection of fraudulent transactions.

 

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now