For you as a home borrower, home loan lenders are angels in complete disguise when you are short of funds. In India, the demand for home loans has been rising every year. According to the report by CRISIL, assets under the management of housing finance corporations (HFCs) as on 31st March 2021 were near Rs 13.2 lakh crore. However, you must be completely aware of the fraud that is linked with home loans, no matter whether you opt for a home loan from a reputable lender like HDFC home loan or Axis or want to avail of a loan of just 1 crore home loan EMI.
What’s a home loan?
A home loan is a kind of financial support taken from lenders for purchasing or constructing a home. Moreover, a home loan can even be taken up for improvements or renovation requirements for an already structured or built home. The financial institution that permits these loans involves banks and NBFCs (non-banking finance corporations). Such loans are permitted by lenders based on your repayment capacity and different property parameters.
Read on here to learn about the frauds linked with availing of a home loan
Bank frauds are certainly not new in our nation. Fraudsters are usually in the news for conducting banking thefts or availing fraudulent loans, majorly home loans and personal loans. Also, there are equivalent shocking instances of a few individuals cheating on others on the pretext of helping with a home loan.
During the past few years, there has been an increment in incidences of loan scams and frauds where many loan seekers were duped of several lakhs under the disguise of providing hassle-free and cheap home loans. Such fraudsters pose as authorized bank agents or financial institutions and attract home loan seekers by offering attractive home loan benefits, which are difficult to resist. Few of the ways such fraudsters may lure you are –
- Lower rate of interest than the published rates on the institution’s website
- Assurance of a home loan with a credit score of between 500 – 650
- Home loan disbursement without adequate and proper income proof
- Home loan on illegal land or properties
Note that financial institutions or banks do not appoint any such agents to assist you without property documents and your proper identification documents. Amid increasing home loan default cases, it must be noted that under no ideal condition do the bank or financial institution disburse a home loan without a strong CIBIL score, inadequate income proof and complete documents of your property. Any claim by an individual for sanction of the home loan against such conditions must not be believed.
Also Check: 1 Crore Home Loan EMI
With the RBI (Reserve Bank of India) increasing repo rates, it is difficult for any financial institution to offer home loans as it was being offered during the COVID times. Now the rates cannot be slashed down and be offered like previous. So, avoid believing anyone who randomly calls you and offers an unbelievable rate on a home loan.
Types of frauds
Case no. 1
Such individuals generally procure contact details of individuals applying for the home loan by unfair means and cyber hacking activities. These are those individuals whose home loan applications were turned down owing to inadequate property documents, lower credit scores or low-income proof. On getting these individuals’ details, these fraudsters contact them to convince them that they can approve a home loan, which banks might not be able to sanction through the regular process.
Here, they provide an in-principal sanction letter from the banking, claiming this to be the final sanction letter. These letters usually are fake in nature. In a few cases, such fraudsters even provide a genuine principal sanction letter, which you can procure through the bank personally.
However, the major hurdle begins when you tell them to provide you with a disbursement letter, which is impossible to produce without proper income proof, property documents and a good credit score. Post this, and such agents might inform you that this loan has been turned down by the bank. However, by then, such agents would have made a lot in the form of processing charges, down payment fees, stamp duty fees, etc., which comes to some lakhs of rupees.
Case no. 2
This includes a professional call centre that employs several individuals to contact prospective home loan seekers. The benefits promised are almost the same as stated above. They also ask for your personal identification documents like your PAN card, Aadhaar card, IT returns, bank statement, salary slips, and postdated cheques. These cheques are generally collected under the pretext of EMI repayments. In the case of ECS (electronic clearance service), a transfer is impossible at times owing to a few reasons.
Such postdated cheques are then used to withdraw funds from your account. Additionally, the documents provided may be used to open any bank account or take a fraudulent credit card or loan in your name. You would then be entitled to repay such a loan without receiving any kind of money.
Note that such fraudsters are least interested in knowing what your credit score is and how your past credit history has been and promise to overlook your credit score and provide you with the loan proceeds with minimal paperwork. This must act as a trigger to you that such transactions are not being conducted with an authentic person.
Case no. 3
This case is the same as case 2, where the overall procedure of committing the fraudulent activity is the same but includes an online medium instead, like through UPI, mobile banking, net banking, etc. Here, in place of collecting your postdated cheques, such fraudsters ask you to transfer a certain amount digitally as commission to begin with your home loan process.
Once you transfer this amount in a day or two, you may be informed that the loan that you applied for with the bank has been turned down due to some reason. After this specific call, they never respond to your messages or calls ever.
