Banks might get positive effect by foreclosure ruling
On Tuesday, bankers and property market analysts said that the position of the bank can improve by a rare court ruling that would allow property foreclosure by a UAE lender. However, there is a little possibility for the market to see a rush for repossession.
This week, London-based Barclays Bank forwarded that it had won a case in a Dubai court to foreclose on various properties. No details were provided by the bank.
Matthew Green, associate director of CB Richard Ellis Middle East, the regional arm of one of the largest real estate developers in the world, "Now that a precedent has been set, we can expect the number of cases to increase as more banks start seeking this kind of avenue."
He added, "However, banks would probably attempt to explore other means and arrangements before going to court. They don't want to have the liability of obtaining these assets or going through a long legal process. It's always easier to settle through roll-over payments or extending the payment period."
Foreclosures were used very less often until this ruling, in spite of a 2008 law that allows lenders to take the step against defaulting borrowers.
It was forwarded by Jesse Downs, director of research and advisory services at Landmark Advisory, a Dubai-based consultancy that earlier, UAE banks had foreclosed on commercial properties and residential properties; however only in cases where residential units were purchased by an investor.
The Central Bank figures unveiled an increase by 123% to Dh126 billion in the total loans in 2008. Due to more conservative growth of banks amidst rising non-performing loans, mortgages totaled just Dh137.8 billion through 2009.
New Zealand News
- Tesla to design & build affordable EV in China: Tom Zhu
- First deliveries of all-electric Porsche in Australia to take place this weekend
- Crown Resorts suffers record six-month loss due to COVID-19 closures
- Australia’s Crown Resorts 'not suitable' for Sydney gaming license: Inquiry Commission
- What Does Phasing Out Cheques Tell Us About Finance in New Zealand?