r2i forum

I need some advice from people in this forum. My ex husband and I had bought two apartments in India back in 2007 and provided a GPA to my dad to avail the loan. The builder who sold us the apartment hooked my dad up with an ICICI agent. We have been paying for the apartments for last several years. Upon my recent visit to India to check the loan balance, I was shocked that the loan amount had not reduced at all. In talking with the Bank Manager, he indicated that the loan was a floating rate and the term had increased from 180 months to 400 months due to increase in the interest rates. Even after paying 12 lakhs for each apartment we are still left with the original loan balance of 23lakhs per apartment. I contacted the Branch Manager and Regional Manager to discuss one time settlement options and they said that they cannot and will not do it.

I have explored several options including selling the apartments as I am the manager of the apartments as per our divorce decree. With the current housing market the sale value is not enough to pay for the entire loan amount. I would have to shell out another 10 lakhs to clear the loan. It has been very frustrating and I hate ICICI bank staff. I have stopped paying for the EMI for last 4-5 months now. I have several questions and if someone can clarify that would be great:

1) If I let it go for auction and the property is sold under-value, how will the bank try to recover the remaining balance? Is there any possibility that they might attach it to our paychecks here in US?
2) We are US citizens, does the same rules for NRI also apply to USC in terms of loan auction and payment of the unrecovered money?
3) Can we appoint an attorney in India or US who might be able to help us get out of this mess as being a single mom and mother of two young kids, I cannot come up with that kind of money.

Thanks for any advice!
Bindu:(

You have basically been paying interest on loan and never bothered to pay the prinipal. Should have kept an eye on those things.. Anyways -
1. No property in Bangalore is less than 23 lakhs!!... So, you should try to sell it yourself.
2. Pay EMI, dont stop, with penalty and other things, you will be worse off.
3. If you let loan lapse, bank will attach, auction etc, but all those expenses will be added to your loan amount.
4. They will come after guanrantor of the loan.
5. Just because you are USC, does not mean you can take a loan and disappear, the bank will come after you.

Usually you can pay more than EMI , so that number of EMIs start coming down. Also can pay lumpsum, e.g. pay 5L now, and another 2L, 6 months down the line.

There are plenty of horror stories of ICICI bank's home loan tenures stretched from 10 years to 70 years making home buyers slaves for life. However the fact of the matter is, much of our EMI goes towards interest portion in the beginning years and no wonder our principal reduction would be in the range of 1-2% in the first 5 years. The banks have discovered this magic 'floating' which many buyers are not aware of what one is getting into. I too was victim of such home loan and had to look for overseas employment to clear off the loans. It was a life lesson for me and never bought another property in India even 6 years after clearing the loan.

There are plenty of risks if you default. Your name would be put under CIBIL and would never be entitled for any other loan in India. For NRIs, without revealing to buyers the banks in India are making resident indians as co-borrowers akin to guarantor. Sooner or later the bank may handover your case to recovery guys who in turn might give sleepless nights to your parents if they are residing in India. The auction by the bank would not be in favor of the owner and it loads up additional charges of auction on to buyer. Invariably the auction reserve price is set minimum as bank's loan amount and you don't get any benefit of appreciation. This goes more like a distress sale.

My suggestion is continue to repay the EMI and put it on sale asap. I am sure the appreciation of property would come to your rescue atleast as break-even to cover all your costs towards interest paid as on date, loan pay back & other penalties clearance. This way you & your co-borrower can have mental peace with out these pseudo assets.

See
Talking about bad about ICICI is not going to help at this point of time. Ill suggest the following as options
1) In bangalore the property appreciation is not high as happens in other places
2) But Bangalore fethces you good rent.
3) If the rent is good. Keep the property and pay the EMI
4) Transfer your home loan from ICICI to trusted LICHFL, SBI or other bank like SB Mysore. LICHFL offers fixed rate thats is best. SBI offers floating rate that is best.
5) Pay up your EMI. dont stop. it will affect your credit rating
6) Dont go settlement. It will affect your credit rating.
7) Wait for good time, keep watching. Exit when you wanted it.
I may not like to point out the mistake. But for the general learning for the forum members.
I would usually blame the borrower for the following reasons
i) For not checking with terms and references
ii) Easy entry is a BAIT with private banks while exit is difficult. where as Public sector, the entry may be bit difficult while the exit will be good and one would be life long peaceful
iii) Not monitoring the loan balances, rate of interest on a periodical basis say every 3 months and see how much it differed from the original sanction. See, The EMI that was contracted say at 9% would not be sufficient to cover even the interest at 11%. So naturally you are not even paying the interest and the no of months keep going up.
So, its a borrower who need to be more vigilant than the bank.
I didnot meant to hurt. But thats the actual thing
Sathya
Home loan counsellor for Govt Banks like SBI, LICHFL
9444415038