Denial of reverse mortgage loan application by bank on the basis of cibil investigation
Guest
(Querist) 04 May 2014
This query is : Resolved
Dear Sir,
My father is a retired senior PSU executive who applied for a reverse mortgage loan with IDBI Ltd. As on date their is nothing outstanding on the property except the current ongoing home loan with HDFC.As discussed with the IDBI bank people it was assured that bank would clear off the remaining outstanding in the name of the property to be mortgaged with the sanctioned RML Amount.All the legal and technical(valuation) was done at my father's cost satisfactorily.
Unfortunately now the bank people say that his cibil investigation shows some delay in payment of EMI'S Which makes the asset stressed and disqualified for RML.
The questions which are bothering me are-
1)He was never a defaulter of any financial lending institution.
2)Apart from certain delays in payment of EMI's in respect of the home loan due to stressed finances at his end, its still paid regularly and the asset is not in NPA category.
3)There are no outstanding dues against the property.
4) As understood & discussed with professionals, the “Reverse Mortgage loan “ is not to be treated as a normal Loan against Property where EMI credibility/ Credit worthiness of the borrower is to be ascertained by the bank thru CIBIL report investigations. Here the property is reverse mortgaged to the bank by the beneficiary (Sr. Citizen) who has no source to finance his pressing family needs. I have even studied the National Housing Bank (NHB) guidelines for RML.
I understand that CIBIL score has no role to play in this case as the borrower opts for this only when he has no means of earning for meeting EMI burden. The question of credibility limits only to the extent that the deed is clear .
As far as I understand the basic intention with which the Government of India launched this “RML Product” under the National Housing Bank Guidelines ,was with the prime motive of helping the aged and the needy senior citizens to lead a life of dignity in their golden years of life when they have no one to support and no source of stable income left, thereby utilizing the equity of their self- owned and occupied residential property to come to their rescue.
It’s not a regular home loan transfer from one bank to another bank or a equity based mortgage where the borrower has to pay regular monthly installments to the bank, that the question of my father's residential property being called a ‘stressed asset” comes in to picture. Here the borrower throughout his life doesn’t have to service the loan and hence requirement of seeing past credit history has no relevance at all.
I would be grateful if you can guide me thru...and advice me appropriately that what he can do to claim his justified right of getting the loan.
Regds
Rashmi Upadhyaya
LL.B (Final Yr)
CS (Executive)
Guest
(Expert) 04 May 2014
I do not think there would be any advantage by transferring the loan from HDFC to IDBI in the interest part.Once a bank had refused it would be difficult to make them agree for the same.I would advise you to contact Banks like Repatriates Co-operative Banks and other similar banks explaining the facts and these sort of Banks today are very flexible,understanding and with competitive interest rates also and speak to them about cibil alsi in advance.
P. Venu
(Expert) 05 May 2014
You can bring the matters to the notice of the Banking Ombudsman to ascertain the reasonableness in the stand of the Bank.
K.K.Ganguly
(Expert) 05 May 2014
Your PM in this regard has been replied.
Raj Kumar Makkad
(Expert) 05 May 2014
Unless the cibil record is corrected, none of the banks shall become ready to advance you. Bankers ombudsman is the proper authority to be approached in the given facts.
T. Kalaiselvan, Advocate 
(Expert) 07 May 2014
If all your efforts to the bankers to reconcile the issue failed, you may approach the Banking Ombudsman for relief and remedy.
ajay sethi
(Expert) 07 May 2014
approach banking ombudsman . try for reverse mortgage with cooperative banks .
Guest
(Querist) 15 September 2014
Thnx all :)
