3 pivotal aspects of Loan origination in Loan Against Property

1. Technical: 
Comprises of property valuation
– whether it has been constructed on authorized land 
– completeness of the project
– location
– any deviations from plans
– and occupancy.

It is generally done by a competent & trained person who is licensed to do valuations. Once done, they will give a value for the property, which is almost subjective.

2. Legal: 
Establishing that the title deed/ownership certificate matches the customer’s details.

Lawyers usually do this work of vetting along with the registrar/sub-registrar’s office and check the originality of the documents.

It’s a little strange, but in North India, it’s not uncommon to discover fraud at this level of assessment – companies have found 3-4 title deeds against the same property, so this check becomes extra-important.

3. Credit: 
Credit underwriting is the 3rd and final step – The borrower’s regular cash flow analysis by seeing their bank statements, bureau checks, etc.

The main challenge here is to obtain all the documents, which takes a lot of time. A best-case scenario is to complete the process in 5-6 days, but it can certainly take longer if the complexities arise.

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