Bank auction property but EC is not clear
7 months ago
Mr.X had mortgaged flat and took loan from union Bank. UCO bank took over the loan but forgot to register the details with sub registrar so union Bank name is showing in EC. Mr.X has died, wife did not pay the loan. UCO bank is auctioning the flat without EC in its name. Can I buy the property?
A.Dear Client,
Until and unless a debt or loan is written off, the status of the Encumbrance Certificate(EC) will show the name of the earlier mortgagee when a loan is ported from one bank to another. And in terms of the loan agreement, the mortgage deed was executed with the borrower who passed away without clearing the debt lying outstanding against him. Accordingly, for non-payment of the loan outstanding, the bank takes the recourse for recovery of the outstanding loan by auctioning the property against which a mortgaged deed was executed. Once the outstanding loan is written off with the auction of the property, the UCO Bank will inform the primary lender Union Bank who would then issue of deed of release of the said mortgaged property which is bought by you through auction. Once the deed of release is issued by the Bank, the title and encumbrance status of the property change accordingly. On payment of the bid value to the Bank and on receipt of all original documents along with NOC from the bank, the property will be registered in your name on payment of appropriate stamp duty and registration fees.
Until and unless a debt or loan is written off, the status of the Encumbrance Certificate(EC) will show the name of the earlier mortgagee when a loan is ported from one bank to another. And in terms of the loan agreement, the mortgage deed was executed with the borrower who passed away without clearing the debt lying outstanding against him. Accordingly, for non-payment of the loan outstanding, the bank takes the recourse for recovery of the outstanding loan by auctioning the property against which a mortgaged deed was executed. Once the outstanding loan is written off with the auction of the property, the UCO Bank will inform the primary lender Union Bank who would then issue of deed of release of the said mortgaged property which is bought by you through auction. Once the deed of release is issued by the Bank, the title and encumbrance status of the property change accordingly. On payment of the bid value to the Bank and on receipt of all original documents along with NOC from the bank, the property will be registered in your name on payment of appropriate stamp duty and registration fees.
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A.Dear Client,
If the EC still shows Union Bank's name as the mortgagee, it indicates that the mortgage with UCO Bank has not been properly recorded. If Mr. X had mortgaged the flat with Union Bank, and the mortgage was not properly discharged or recorded in the EC when UCO Bank took over the loan, it could create legal complications. UCO Bank may not have clear title to auction the property in this situation. If UCO Bank has not properly registered its interest in the property, they may need to rectify this issue legally. This could involve updating the EC and obtaining the necessary approvals from the relevant authorities.
If the EC still shows Union Bank's name as the mortgagee, it indicates that the mortgage with UCO Bank has not been properly recorded. If Mr. X had mortgaged the flat with Union Bank, and the mortgage was not properly discharged or recorded in the EC when UCO Bank took over the loan, it could create legal complications. UCO Bank may not have clear title to auction the property in this situation. If UCO Bank has not properly registered its interest in the property, they may need to rectify this issue legally. This could involve updating the EC and obtaining the necessary approvals from the relevant authorities.
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A.Dear Sir,
You are inviting some risk. The said lacuna is to be rectified there after you can purchase such property from UCO Bank.
You are inviting some risk. The said lacuna is to be rectified there after you can purchase such property from UCO Bank.
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