If you fail to make three (3) consecutive payments, the financial institution will take the necessary actions to recall the loan.
In the worst case scenario, the financial institution will foreclose 1 the property and sell it to settle the loan.
The borrower would still be liable to pay the difference between the auction price and the loan amount outstanding.
- Foreclosure - Legal action available to the financial institution for recovering outstanding sums owed by a borrower who has defaulted on his/her loan. The property pledged by the borrower to secure the loan is sold and the proceeds of the sale used to settle the outstanding loan amount.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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