ISLAMABAD: The government decided in principle to grant commercial banks significant powers to take over mortgaged houses in case of default after a cumulative notice period of 90 days, in a move aimed at encouraging lending to the housing sector. The proposed foreclosure law to amend “The Financial Institutions (Recovery of Finances) Ordinance, 2001”, currently under review by the National Assembly’s Standing Committee on Finance and Revenue, provides that where a customer defaults on payment of mortgage dues, the financial institution may issue three notices of 30 days each, “demanding payment of the outstanding mortgage amount”. “In case of default in payment by a customer after service of the final (third) notice, the financial institution may proceed with the sale of the housing unit, provided that all notices have been duly served upon the mortgagor, who has remained in default of payment of mortgage dues or any part thereof.” The Standing Committee on Finance, which held a meeting in Islamabad on Thursday and was presided over by former finance minister Syed Naveed Qamar, raised serious reservations over the drastic conditions apparently favouring commercial banks over customers.