im afraid, that we are going to repeat the same story of mortagage fraud happend in U.S, im surprised how our builders are able to sell maximum of their project without having proper document of it.

even we dont have any regulatory body for our real estate secotr.i really feel bad when i see my custmors suffering
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  • Originally Posted by pallavidutta
    im afraid, that we are going to repeat the same story of mortagage fraud happend in U.S, im surprised how our builders are able to sell maximum of their project without having proper document of it.

    even we dont have any regulatory body for our real estate secotr.i really feel bad when i see my custmors suffering


    Dear friend,

    You look to be frank, possibly may not fully fit into the present type of job. In your own way, you may help the customers not telling incorrect things. There is always something between YES and NO- TRUE and FALSE- RIGHT and WRONG-

    ks2071746
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  • hi KS

    im fully agreed wid tht, but its not only about my customer, its about the ethics and economy of the country we all are suffering from what happend in U.S....
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  • In today's global economy, all the countries/economies are interlinked. What affects one would have varying degrees of effects on all. And especially when we talk of a giant like USA, a negative impact on US is bound to send reverberations across the globe -- India included. Additionally, the laws of economy and free market are applicable to all countries.

    So yes, we are witnessing the deflation of a bubble, just like US witnessed in the last 3 years. The big difference is that in US the dealings and transactions are much cleaner and more transparent so the correction happens at a good pace and is also visible to all. India has a murky landscape in RE with a good deal of black money pumped in, so the correction in India would happen at a different pace, and is as clearly visible.

    Are you a developer or a broker? (Since you mentioned something about 'my customers')
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  • hi

    hi i agree that we are going to follow the us economy very soon ... and symptoms of this have started to visualise here in form increased cases of frauds.
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  • Do think Indian banks will need bailout in future as they will be stuck with bad debt

    What we are seeing in RE is just a slowdown and deniel mode that the US was in mid 2007. There is much more pain yet to come. You will see many builder/developer go bankcurrupt or liquidated. Indian Banks getting bailed out as they will be stuck with bad debt. Now is NOT the time to jump in and buy thinking it's deal.
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  • hi

    hi
    im a home loan coordinator at a bank ... and actually what i see developers **** their "*0% of their project before completion of documentation" (quoted by a developer it self) at the developers side.... im surprised how they manage it how they could **** those properties whose complete possesion is not in their hand..... as a result of which we see delyed completion of project, winding up of the project, or even running away with the money.

    Thanks & Regards
    pallavi
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  • So what are your suggestion and recommendations about this economic fallout. As an end costomer or user what shoud we need to do, to safe guard our existence? And i am not getting your *(star-ed) messages. I am not a good guesser. Please write in graceful language in future so that people like me could read it and feel it.
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  • Well, I don't agree if that kind of blunder and at that level is possible in Indian R.E. There are some problems but are manageble.

    1. There is a lot of black money involved in end user's market in India. It can be up to 90% of the transaction amount (i.e. fair market price) and the banks disbruses loan only on the transaction amount which is declared.

    2. Even if you look at the investors market, in the era of soft launch and prelaunch in the last 4 years, the fly-by-night operators did collected and duped the hard earned money of investors. But again here too banks were not involved.

    Regards

    Indianil
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  • Originally Posted by Indianil
    Well, I don't agree if that kind of blunder and at that level is possible in Indian R.E. There are some problems but are manageble.

    1. There is a lot of black money involved in end user's market in India. It can be up to 90% of the transaction amount (i.e. fair market price) and the banks disbruses loan only on the transaction amount which is declared.

    2. Even if you look at the investors market, in the era of soft launch and prelaunch in the last 4 years, the fly-by-night operators did collected and duped the hard earned money of investors. But again here too banks were not involved.

    Regards

    Indianil


    Dear friend,

    What you have said here cannot be disagreed.

    ks2071746
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  • I don't really agree with my previous two members (I suppose Mr KS2071746 is a moderator). Really this statements are not only for a state or a region as such, but whole India itself. There are news where end-users are told something initially and has been delivered something else. Leave those stories, regarding mortage fraud what would you say of 7 heavens........ sorry, intentionally i mentioned the name to draw an example for everybody. I have other names to draw an example, but those company existing might find hard to digest but they are walking on the same path. Comparing the Northern and Southern India, North Indian real estate companies have flourished faster. Do all the companies have worked on ethics. I personally know some names who started a company 2-3 years back, collected a huge amount of money and then vanished virtually. They formed another private company and now doing good job. To find out the truth one may refer to the cases pending against various promoters of different companies in Hon'ble Delhi High Court and Hon'ble Supreme Court of India. .......... How many companies are their which are public limited with comparison to private limited. NO COMPARISON, i should say. In a word every man today in upper-middle class and above is trying to have his own real estate company without taking care of any guidelines whatsoever is drawn by Hon'ble courts and RBI in loan directives. So ............. i conclude, we are sitting right on mortgage fraud bomb..... which may explode at any moment. Involvement of banks are not necessary in case of our country because of the system which is much different then that of US. So it is you who should take care of our own money.
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  • Why we should watch our real estate developer because the developer uses their customer to raise money from market by using Mortgage or Home Loan.

    In India if a developer want to raise money from bank then they have to go for project appraisal and have to provide extra collateral ( Property as security) and have to pay interest 15% per annum.

    Home Loan is liability of customer and not developer

    Very recently I came across a new trend where developer looks for high net-worth individual, who can borrow good sum of money. The developer take very less or no money and issue receipt on PDC. Further developer undertakes to pay EMI of Customer for a period of construction time. The developer further enters into a back agreement with customer to purchase property back at pre-decided rate.

    What is the catch or problem with this exercise?
    Developer issue few papers to banker (HFC) and they are as follows:
    § Builder er Agreement
    § Permission to Mortgage
    § Tripartite agreement
    § Money receipt

    Apart from these, Developer provides all photocopy of land documents and photocopy of approvals and Maps for project approval form Home Loan Bank or HFC.

    In Permission to mortgage and TPA, the Developer promises to Bank or Home Finance Company that they will not transfer the property without the permission of Bank or HFC.

    See in this case, if developer go through tough time and do not pay the EMI, then who going to be loser.

    If developer stops his project then how bank going to recover the money. Will bank people run after the borrower or the developer?

    During the construction time until the possession handed over to the customer, sale has been done on builder er agreement issued by the developer. How we assure that developer only issue “Builder - er Agreement” up to the availability of the flat in his project .What is the surety he has not issued two or more builder er agreement for same flat
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  • Udayan, I do agree with you. Perhaps, I might have misunderstood the topic. I was under conception that if the sub-prime crisis of US can happen in India ? Like our own 1st rated bank, SBI, can face / suffer the same what one of the oldest bank Lehman Bros in US suffered.

    Every one has come to know the ethics and transparency of the developers by now. In every booming market, fly-by-night opertors emerges. Be it R E or stock market or any other sector. When ever there is an unprecedent price rise / boom in a sector, you will find something fishy at the end of the day.

    Investors / End users are suffering and being myself an investor, I can feel the pain.

    Well, there has been alot of hue and cry over the R E. Why we are not talking about the stock market where the fall is up to 60%. As far as my knowledge is concerned, there is no place where the R E has fallen by more than 40%. And if we talk about the liquidity, a prudent investor knows that its the drawback of RE as an investment.

    Regards

    Indianil
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  • Originally Posted by ks2071746
    Dear friend,

    You look to be frank, possibly may not fully fit into the present type of job. In your own way, you may help the customers not telling incorrect things. There is always something between YES and NO- TRUE and FALSE- RIGHT and WRONG-

    ks2071746


    I draw this quote to thank pallavidutta to bring out such topic due to which the whole world is influenced today. Could any body co-relate me the mortgage fraud in US and how can we face a similar situation? I have read some articles and would be delighted to compare and share my views. I want more Indian friends to visit and discuss the topic and vote at the same time.

    Udayan
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