bank loan guarantee documents can be recovered after half repayment?
in case some body has taken loan from bank and has submitted papers of their property as security and property papers of two other parties acting as guarantee for the loan. in such a situation is there any way to repay half the amount of the loan to the bank and keep the paper of the guarantee submitted with the bank and release the property papers of the payer(the one who took the loan).if this is possible then plz inform theprocedure for a way out of such a situation.and bank demand the balance amount of loan from the guaranter
According to a ruling passed by the Supreme Court in May this year, if a debtor defaults, it is the guarantor's responsibility to repay the entire loan. The Supreme Court court ruling was passed on a case filed by one Ganga Kishun of Uttar Pradesh, who had stood guarantor for a loan taken by his friend, Ganga Prasad, who died without clearing the loan. The Supreme Court held Kishun liable to pay Prasad's dues as he had been the guarantor for the loan.
Further now banks have power to enforce the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFAESI) to recover non-performing assets without the intervention of a court of law, this is the last step they prefer to take. A bank usually lets one mortgage payment default slip by, but for the next one, it will mail you a reminder to inform you that your payments are late. After three defaults, the bank will send a demand notice, asking you to pay your dues as soon as possible. If the borrower doesn't respond to any of the mails, the bank sends a legal notice through its legal department. A bank waits for three months before declaring an asset a non-performing one. After the end of this period, the bank can officially term the loan an NPA and start the process of recovering the property through the SARFAESI Act. Even after invoking the Act, the bank gives the borrower a 2-month notice period to repay the dues.
Finally, five months after the first default, the bank sends a notice, stating that it has valued the property for a certain sum and that it will auction the house on a particular date. This is usually set for a month from the date that the bank mails you the auction notice.
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