Reverse mortgage products receive modest response

The
innovative contrary mortgage product, announced by finance curate Phosphorus Chidambaram
in the Budget for 2007-08, have received a modest response from the targeted
borrowers. This is because of ambiguity in taxation issues, and even cultural taboos. But since there is a important ageing population who could potentially benefit
from this scheme, Banks are hopeful that the strategy will acquire popular in due
course. Chidambaram had stated
that National Housing Depository Financial Institution (NHB) will present a contrary mortgage strategy for
senior citizens. After the contrary mortgage guidelines introduced by NHB,
several Banks and Deewan Housing Finance have got launched the strategy for senior
citizens. The Banks that have got launched the strategy are Punjab National Bank,
State Depository Financial Institution of India, Depository Financial Institution of Baroda, Allahabad Bank, North American Indian Depository Financial Institution and private
lender Axis Bank. Under this
scheme, the place is pledged with a bank, which pays a monthly installment to
the individual for a fixed clip period of time. At the end of these payments, the
property belongs to the lender. Housing regulator NHB have written to Central
Board of Direct Taxes, asking that the loan given to the senior citizen should
be exempted from Income-Tax.

Also
Read

Ã

Ã

Ã

Ã

Ã

Ã

Officials say
that this is a demand driven merchandise and is not marketer driven. It is available
for anyone who wishes to choose for this product. The quality of the underlying
security championship a mortgage is important, they said. Going forward, the product
can also given rise to trading in mortgage-backed
securities. Sir Joseph Banks also need
clarity on the provisioning they necessitate to do for such as loans.