Clause & effect

Not quite a clause for concern yet, but if property prices fall far enough, trouble lies ahead. Buried deep in the bowels of any home loan agreement is a sub-head that goes, ‘events of default’, within which is tucked away a clause that in English means, if the value of the house for which a loan has been taken falls below the loaned amount, the bank, unilaterally, can demand that the borrower make good the difference, or else be declared a defaulter.

Opinion in The Indian Express, June 19, 2006