NEW DELHI: Home finance companies are jittery about the National Company Law Tribunal’s decision to initiate insolvency proceedings against real estate companies like Jaypee Infrastructure and Amrapali’s Silicon City because the insolvency and bankruptcy code (IBC) does not treat home loan financiers as secured lenders.
With the implementation of the IBC in regard to a housing company , the home loan -considered to be a secured loan as it is lent against an under-construction housing unit as collateral -will become an unsecured loan, like any other personal loan. In effect, it means that if the borrower stops paying EMIs for a home in a project that has gone into liquidation proceedings, the lending institution has no underlyi…
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