Intelligentsia wrote:Angelica _ann wrote:If on mortgage and charge is title to the apartment if you default what would the financial institution do?
Proper lending practice recognizes that security is just insurance in case you don't pay.
The fact that the security is gone does not mean your ability to repay is also gone - those are 2 different mutually exclusive manenos.
Si bado unaenda job? Si bado unatwanga biz and getting some mullah? Unless the biz was located at the affected premises.
So Banks will still come after you to pay if you default; for starters, utaingizwa CRB.
And given you signed a personal guarantee, all your other assets plus the kienyeji kuku you are keeping for the coming Xmas festivities can be sold off to pay off the outstanding bank debt.
If someone else had guaranteed your debt, the bank will come for them with the same gusto and the courts ruled recently that even the guarantor can now be listed on CRB if they don't pay off a debt they have guaranteed.
Guarantor assets can be similarly sold.
If you have no further assets of value, and you have the means, then the bank can apply to have you committed to civil jail for willingly failing to pay off its debt.
I am of the opinion that if your property was illegal, then both you and the bank suffer, you cease paying the mortgage the minute the property is pulled down.
As the bank also carried out its due diligence before charging the property, and since they knew the reasons for your borrowing, I think one can argue that the contract is null and void since its based on an illegality, and from then on you shall not need to pay for the mortgage.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins