Bank wants to sell off my homeThe cross default clause can let the bank recover the loan amount or EMI by selling your house and term you a defaulter
Apnaloan.com Research Bureau
10 Aug 2007
I have taken a home loan from a private sector bank. I also have a credit card from the same bank. I have an ongoing dispute with the bank on some unauthorised debits on my credit card which I have refused to pay. My payments on both the home loan and credit card (except the disputed items) have been on the dot. The bank has threatened to declare me a defaulter on both my home loan and the credit card and have further threatened to take possession of my home and sell it to recover the disputed payments. Can the bank do this?
Most home loan agreements have a \'cross-default\' clause, which enables the bank to declare you a defaulter for all loans from them if you are in default on any relationship with them. This clause is a standard clause and allows the bank to recover all dues by selling any security that they might hold against any of the obligations to them. You should take up this issue with the senior management of the concerned bank and solve it amicably.