In case of a default, it is best to approach the lender for an amicable settlement. If all efforts for repayment fail, the lender is likely to take over and sell the mortgaged property. No doubt, it is painful to let go of your prized possession, which you may have acquired with lifetime's savings. However, in such circumstances, borrowers need to be aware of their rights, which provide adequate opportunity to repay.

As regulated entities, there are certain limits that banks cannot cross. For instance, RBI guidelines do not allow a lender to repossess without proper notice. The central bank also has norms that are taken into consideration under specific circumstances. There is a procedure for taking possession of the security, provisions regarding a final opportunity to repay and a process for selling the property. These are in
addition to the strict guidelines for recovery agents.

Usually, banks invoke the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (Sarfaesi) Act for a quick recovery. This involves a 60-day notice period.