[My Questions]

Home Loan in Dubai? I've purchased a property in 2008 for AED 1.2 Mln. I paid 100,000/- in cash and availed loan from the bank for AED 1.1 mln. Till Dec 2010 I've paid the EMIs regularly. However, I'm not in a position to pay the EMIs anymore. Please advise what I can do in this situation? Can I foreclose the loan without paying any amount to the bank? Please note that the current valuation of the property is below the loan outstanding against it. What action the bank will take if I don't pay the EMIs?

[Fairies wear boots]

No bank in Dubai wants to foreclose on a mortgage. Foreclosure costs the banks in Dubai more money than they can make back from the foreclosure sale. Therefore, lenders in Dubai do not foreclose in order to make money, but only reluctantly as a way of limiting losses on a defaulted loan on a property in Dubai. This is why, if you get behind on your mortgage payments, your bank in Dubai will work with you to devise a practical plan to cure the default and bring the loan current. In order to do so, however, you must stay in communication with your bank and be honest in evaluating your financial situation. The willingness of the lender in Dubai to work with you to get past your current problems will depend heavily on your past payment record. If it shows consistently timely payments and no serious defaults, you will find the lender in Dubai much more receptive than if you have a record of unexplained chronic late payments.On 13 January 2010 it was widely reported that Barclays Bank had become the first bank in Dubai to win a foreclosure order in the Dubai Courts, allowing Barclays to seize several properties. The Mortgage LawThe foreclosure ruling was made pursuant to Mortgage Law No. 14 of 2008 of the Emirate of Dubai (the Mortgage Law). The Mortgage Law allows a mortgage lender (the Mortgagee) to commence proceedings to sell a mortgaged property if the debt owed to that Mortgagee is not settled on its due date. The debtor or the possessor of the mortgaged property must be served with a notarial notice at least 30 days prior to the commencement of proceedings (Article 25). If the debt is not discharged within this statutory period, the Mortgagee may request that the Courts issue a decision for attaching the mortgaged property so that the property may be sold by the Land Department at public auction (Article 26).The debtor can petition the Courts to delay the public auction, which may be delayed by the judge for no longer than 60 days if the judge is convinced that (a) the debtor can discharge its debt if additional time is granted and (b) the sale of the property may cause serious damage to the debtor (Article 27).If the debt remains unsettled beyond the 60 day period, the property will be sold at public auction in accordance with Land Department procedures (Article 28).