Top builders used dummy buyers to get cheap bank loans
After DeMo they stopped paying EMIs; loan-takers pushed to suicide
New Delhi: Demonetisation has unraveled a deeply fraudulent loan practice that existed in the real estate sector wherein builders, in collusion with banks, got individuals to take loans posing as buyers (home loans to private individuals come at a cheaper interest rate), and thereafter channeling the disbursed amount into their businesses.
The modus operandi goes like this: Mohit Saxena (31), father of an infant, urgently needed money in 2015. He owed numerous loans for his mother’s treatment, his sister’s and his own marriages. Two agents, Nandan Jha and Ajay, of a particular builder came to Mohit with a proposal to obtain a bank loan for them, promising Mohit 4-6 per cent ‘cut’ on the total disbursed amount. The EMIs were to be paid to the bank by the builder, but through Mohit, the official loan-taker.
To Mohit’s surprise, the builder created three loan files instead of one. Out of greed, he signed the loan documents. The agents assured him that the loan is going to be repaid in two years flat. So, Mohit went ahead with three home loans totalling to Rs 1.5 crore, the EMI for which was Rs 1.5 lakh a month. Mohit’s monthly salary is Rs 50,000 and his wife, then working, is now without a job.
Within a few months, Mohit started getting calls from the bank as the builder had stopped paying the EMIs. Caught in a terrible debt trap, Mohit attempted suicide twice. “First, I tried to jump before a Metro train, but a fellow traveller pulled me back. After that I tried to hang myself,” he said. “After demonetisation, the builder has stopped paying the EMIs for all the three loans… loans which are in my name. I don’t know what is going to happen now and how could I possibly repay a Rs 1.5-crore loan with a monthly salary of Rs 50,000.”
Banks give loans to builders at an average interest rate of 14-18 per cent, while private equity funding charges 20-25 per cent. Hence, builders had resorted to the fraudulent practice of using ‘ghost’ home-buyers to get loans on their behalf, promising them a percentage of the disbursed amount and assuring that EMIs will be taken care of.
“There are 70-80 victims like me in the same project of JSS Buildcon,” Mohit revealed. Ritesh Sharma, another ‘ghost’ buyer, claimed: “Almost all builders indulge in such loan-packaging fraud”.
Around 95 builders, including Amrapali, ATS, Supertech, Shubhkamna, JSS Buildcon, Unitech and Omaxe were on Greater Noida Authority’s defaulter list as on July 2017. Sources said that most builders had used ghost buyers. Sharma said, “Let’s audit the finances of each and every project, and especially those who defaulted with the authorities”.
Vice-chairman of National Real Estate Development Council (NAREDCO) Parveen Jain, said, “If ghost buyer thing is going on, then a proper verification procedure should be in place so that this thing does not happen. In today’s scenario, it seems very difficult for such a thing to happen because of fool-proof identity systems prevailing… until and unless the parties involved are hand-in-glove. Also, the ghost buyers should not fall for this because if the developer abandons them midway, the ultimate sufferers shall be the ghost buyers themselves.”
After demonetisation, the builder has stopped paying the EMIs on loans which are in my name. I don’t know how I can repay a Rs 1.5-crore loan
—Mohit, a ‘ghost’ buyer
If ghost buyer thing is going on, then a proper verification procedure should be in place so that this thing does not happen