Those who take loan should be more aware of the conditions that could lead to their houses being auctioned off. Borrowers must educate themselves on foreclosure procedures.
Generic Foreclosure Procedure For Properties With Individual Titles:
1. A letter of demand is issued to the borrower informing him of his breach (of the loan agreement), with a demand to remedy that breach.
2. If the borrowers fails to satisfy the bank, it will issue a notice in Form16D of the National Land Code (a Notice of Default with respect to a charge).
3. The bank files an Originating Summons(OS) and a affidavit in support of the OS to apply for an Order of Sale. Both will be served on the borrower.
4. At the hearing of the OS, the court must be satisfied that the legal documents have been served on the borrower, before granting an Order for Sale.
5. The bank files a notice of application and an affidavit in support with the valuation report to apply for an auction date and the appointment of an auctioneer.
6. Once the court has fixed an auction date and appointed an auctioneer, the auctioneer will prepare a Proclamation of Sale(POS) and advertise the POS in a local newspaper two weeks before the auction date.
7. On the auction day, the property will be sold to the successful bidder.
8. If there are no bids for the property above the reserve price, the auction will be called off. The bank will file a new notice of application and an affidavit in support to apply for a reduced reserve price and new auction date. (Typically a reduction of 10% of the reserve price. However it's up to jurisdiction of the bank to also not reduce reserve price).
9. Process step 1 to 8 is repeated until the sale of the property at an auction.
Note: (a) Step 3-4 will take 6 months.
(b) From step 4-7 will take another 6 months.
(c) Process of public auction or sale of a property (in the case of a property with a separate title) is governed by Section 256 to 269 of the National Land Code.
(d) Where a property has no individual title (with the loan made by way of Deed of Assignment), and there is a default on the loan, then the auction would be a private one.
Picture below: Scene during public auction day in Penang.
This article been written by VULCAN INT'L Real Estate Research Institute(Penang iProperty) for VULCAN INTERNATIONAL Real Estate Investors Club.
VulcanInternational could be contacted at +6 016 451 1321 .
You're welcome to write your constructive comment below.
Back to Main Page: www.VulcanPenangProperty.blogspot.com | International Page:www.VulcanInternational.blogspot.com
Generic Foreclosure Procedure For Properties With Individual Titles:
1. A letter of demand is issued to the borrower informing him of his breach (of the loan agreement), with a demand to remedy that breach.
2. If the borrowers fails to satisfy the bank, it will issue a notice in Form16D of the National Land Code (a Notice of Default with respect to a charge).
3. The bank files an Originating Summons(OS) and a affidavit in support of the OS to apply for an Order of Sale. Both will be served on the borrower.
4. At the hearing of the OS, the court must be satisfied that the legal documents have been served on the borrower, before granting an Order for Sale.
5. The bank files a notice of application and an affidavit in support with the valuation report to apply for an auction date and the appointment of an auctioneer.
6. Once the court has fixed an auction date and appointed an auctioneer, the auctioneer will prepare a Proclamation of Sale(POS) and advertise the POS in a local newspaper two weeks before the auction date.
7. On the auction day, the property will be sold to the successful bidder.
8. If there are no bids for the property above the reserve price, the auction will be called off. The bank will file a new notice of application and an affidavit in support to apply for a reduced reserve price and new auction date. (Typically a reduction of 10% of the reserve price. However it's up to jurisdiction of the bank to also not reduce reserve price).
9. Process step 1 to 8 is repeated until the sale of the property at an auction.
Note: (a) Step 3-4 will take 6 months.
(b) From step 4-7 will take another 6 months.
(c) Process of public auction or sale of a property (in the case of a property with a separate title) is governed by Section 256 to 269 of the National Land Code.
(d) Where a property has no individual title (with the loan made by way of Deed of Assignment), and there is a default on the loan, then the auction would be a private one.
Picture below: Scene during public auction day in Penang.
This article been written by VULCAN INT'L Real Estate Research Institute(Penang iProperty) for VULCAN INTERNATIONAL Real Estate Investors Club.
VulcanInternational could be contacted at +6 016 451 1321 .
You're welcome to write your constructive comment below.
Back to Main Page: www.VulcanPenangProperty.blogspot.com | International Page:www.VulcanInternational.blogspot.com
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