India, March 10 -- A Bengaluru-based chartered accountant recently shared the story of her neighbour who allegedly lost his home after missing three EMI payments. According to her, the neighbour had taken a home loan for a Rs.1.1 crore flat, but after defaulting on three instalments, the bank repossessed the property and later auctioned it for Rs.95 lakh.

The episode highlights a key lesson for homebuyers with loans: missing EMIs can quickly trigger legal recovery action by banks, particularly if borrowers fail to respond to notices or engage with the lender to resolve the issue.

Housing loan default typically escalates after 90 days of missed payments, when the loan is classified as a Non-Performing Asset (NPA). "Banks first send remin...