NHB to discourage direct Selling Agents,by framing legislations

  UntitledBy Accommodation Times Bureau

The housing finance regulator (NHB) is trying to frame out rules to discourage direct selling agents, from facilitating loan takeover among mortgage companies.

This, although, would affect consumer’s freedom to transfer to another lender within a specified time, the NHB (National Housing Bank) is aiming to ensure that borrowers do not manipulate the system.

“We are watching the space of balance transfer, where lot of direct selling agents is involved and working on industry-wide data,” said Sriram Kalyanaraman, Managing Director of National Housing Bank. “We will look at whether any mis-selling is happening. We are looking for inputs from credit bureaus.” When the borrower takes decision to pre-pay a loan, the amount is deducted from the principal outstanding, which in turn reduces EMIs or the remaining tenure of the loan.

After the pre-payment charges were abolished, customers started switching to low interest rates, moving from one financial institution to other. Banks earlier levied a prepayment charge of 2-3 percent of the outstanding loan amount, if one gets ready to prepay.

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