First foreclosure case to boost confidence

The first foreclosure decision by the Dubai Courts, in favour of Barclays, will raise confidence among lenders, but may lead to an increase in such cases being filed, say experts.

"The [Barclays] decision is a positive step for the market as lenders are now assured there is a full spectrum of remedies available to them," Shahram Safai, Partner, Afridi & Angell, told Emirates Business. "However, it will lead to more cases being filed."

Foreclosure is a legal process by which an owner's right to a property is terminated, usually due to default.

It involves a forced sale of the property at public auction, with the proceeds being applied to the mortgage debt.

Chet Riley, Equity Research, Middle East, Nomura International, said: "The judgment is consistent with mortgage law in developed countries and it is encouraging to see that lender's rights are also being considered. We believe foreclosure remains an action of last resort and that banks and lending institutions should continue to work with borrowers who have financial trouble."

Zeeshan Saleem, Consumer Banking Director, Barclays UAE and GCC, said: "The courts decision in our favour strengthens our belief that the UAE property market is evolving in line with other mature markets."

He said the bank was willing to listen and find mutually acceptable solutions to customers willing to meet their financial obligations.

 

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