Property portal Magicbricks, has scored a partnership with Indian Overseas Bank (IOB), to conduct an online auction featuring over 500 repossessed properties worth more than ₹800 crore (approximately $112 million). The auction will be split into two phases at the end of this month.
The properties are spread across seven zones comprising Chennai, Coimbatore, Mumbai, Kolkata, Delhi, Bengaluru and Hyderabad. Out of the 500 plus properties, majority are from Chennai and Coimbatore, rest are spread across 12 major cities like Mumbai, Pune, Nagpur, Kolkata, Ranchi, Meerut, Lucknow, Ludhiana, Hyderabad and Bhopal.
These properties are mostly foreclosed under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002. When you buy a house with a home loan or take loan against property, you are supposed to pay back the loan with interest within a fixed tenure through equated monthly instalments (EMIs). However, SARFAESI Act allows banks and financial institutions to auction assets allocated as security against a loan, when a borrower fails to repay her loans as stipulated in the loan agreement.
Property seekers can register for the e-auction and can participate by depositing the earnest money in their nearest IOB branch.
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