Property in Dubai
More than 80 foreclosed properties up for auction this year
The number of foreclosed properties is increasing every year, with more than 80 properties ready for auction this year, the Dubai Land Department (DLD) has revealed.
According to the department, at least 35 properties have been foreclosed and were put for auction during the first bulk sale of re-possessed homes last year. This year, the numbers of such properties have shot up to 80.
According to Humaid Al Shamsi, Section Head at Registration Department, the properties have been sold through various auctions during the year. But, these numbers are likely to be bigger. Although, the concept of auction is still new in the UAE, there is good participation, with all the properties being sold for more than the reserve price.
Nearly 70percent of the auctioned properties have been re-possessed by banks, with owners defaulting on instalments. The Mortgage Law No.14 during the year 2008 was meant to speed up the foreclosure process, offering lenders an opportunity to recoup their losses. The new law lenders were allowed to execute a foreclosure through simple hearing before a judge, instead of going through the civil court. Once the judge issues the order, the property can be auctioned by the Land Department.
The Managing Director of Harbour Real Estate, Muhannad Al Wadiya, mentioned that the sale may clear way for lenders to offload millions of dirhams in re-possessed property.
Al-Wadiya mentioned that the auction process needs to be more organized, transparent and well announced to involve banks, sellers, buyers and auction operators.
Although, such auctions may prompt lenders to embark on more foreclosure proceedings, banks and mortgage companies are more focused on re-negotiating deals, and are using foreclosure as last resort. All financial institutions will keep this as the last option, he said.
Posted on 9/4/2012blog comments powered by Disqus