HFCs surprise for those millions of home loan borrowers
The order from the National Housing Bank, the regulator of Housing Finance Companies (HFCs) on treating both sets of borrowers equally should have come as a surprise for those millions of home loan borrowers who found their own interest rates is regularly reset even as the new borrowers were being assiduously besought with lower rates and who were sulking at their decision to go for floating rate of interest. In a major relief to home loan customers, the National Housing Bank asked the HFCs to refrain from levy of penalty on pre-closure of floating rate loans, even if this was made from borrowed money. In generally condition a euphemism for fresh loans at lower interest rates from a rival lender.
The real estate industry and the borrowers welcomed the decisions. Managing director, Sundaram BNP Paribas Home Finance, Chennai Srinivas Acharya In an interview to Business Line expressed the fear that `home loans will be operated as demand loans with frequent shifts of home loans’. There are restrictions on the charging a foreclosure premium on the asset side for HFCs `there is a certain degree of unfairness` in that, Srinivas Acharya said. It will be continuing to pay premiums on foreclosures on the liability side.
