Direct selling agents under watch in home loan transfer cases

To check possible instances mis- selling, the housing finance regulator NHB is examining data on home loan transfers and may issue guidelines for direct selling agents in the interest of borrowers, a top official has said.
"We are looking at it (home loan transfer) closely because some of the complaints seem to be emanating from mis-selling. We are also looking at balance transfers, whether it is genuine customer transfers or agents are playing a game on it. We have asked for some data which credit bureau will share. Once we have it, it will help us to take a call," NHB Managing Director S Kalyanaraman told PTI.

Overall goal of the National Housing Bank (NHB) is to bring in a very well trained set of agents because buying a house is a lifetime investment, he said.
"We want data before, we decide whether it is a systematic risk or we need to do something. There has to be right balance between the customer's choice and the balance transfer. The goal is that customers should have the free choice of the institutions. So our goal is not to take that freedom away from customers," he said.
The direct selling agent should not force borrower to shift running loan portfolio and gain benefit at the cost of latter, he said.

Asked if the regulator can impose a minimum time period, Kalyanaraman said that is what "we have been contemplating. Whether we need to bring in, if so, what period. That will all come in after we see the data. There can be many other ways, like create a foreclosure charges. Whatever we do, we need to do with customer interest in mind".

Recently, HDFC Chairman Deepak Parekh said that allowing customers to shift their housing loans from one lender to another at will does not necessarily ensure growth in housing.
"At an industry level, shifting of housing loans from one player's balance sheet to another does not tantamount to growth in the overall housing market. The overriding objective must always be funding incremental housing," he said in his annual message to shareholders.

Asked if NHB plans to tap external commercial borrowing (ECB) market, Kalyanaraman said, there is no plan at the moment because domestic market provides cheaper alternative for raising fund.
"My business is refinancing at the end of the day, refinance margins are very thin. Today, bond markets...Are much better than raising an external commercial borrowing. I have also got the World Bank low income housing fund of USD 100 million," he said.
Besides, he said the Department for International Development (DFID) of the UK has extended 50 million pound for affordable housing programme.
"We are just about to sign with another multilateral agency about 100 million euro for sustainable livelihood," he said.