NHB and Credit Information Bureau establish central registry of mortgaged houses
03 September 2010
With the National Housing Bank and the Credit Information Bureau of India having joined hands to establish a central registry of mortgaged houses, home loan fraud could reduce sharply. The most common reason for home loan defaults is multiple loans that borrowers take from different lenders using duplicate / forged documents.
According to industry experts this might end soon with the new initiative.
Cibil yesterday launched the country's first mortgage repository in consultation with the National Housing Bank (NHB) with six lakh borrower accounts compiled from inputs from 25 entities. The database of accounts covers a significant chunk of loan accounts in the country. The RBI database has around 7.7 million borrower accounts on record with the commercial banks in the country as of March 2009.
According to NHB chairman S Sridhar, the move is part of the initiative to improve the infrastructure for the housing finance market. At an event to mark the launch of the product he said that as the home loan market evolved there was a need to create appropriate infrastructure.
Also on the cards is mandatory registration of equitable mortgages. According to analysts this would increase the cost of home loans as lenders would have to pay a stamp duty related to the property value with the stamp duty in turn to be recovered from the borrower.
Sridhar added that lenders were in the process of finalising the standards for valuation of residential properties that would be uniformly adopted by all lenders including banks and housing finance companies.