When lelong at loss, you still owe the bank the balance amount. It just didnt disappear away.
Next they will placed caveat on any other existing asset under name and worst case they just file suit for bankruptcy action against you

RPGT not applicable since there isnt any gain. Real Property Gain Tax is gain differential between previous SPA price and new agreed SPA price.

This post has been edited by VireCwx: Mar 13 2023, 08:36 AM

They will send another letter notifying you about the balance amount you still owe them and dateline to settle balance.
Failing to settle will incur charges and interest along the way which will accumulate and balloon into bigger amount.
You will need to find ways to settle the balance.
Either take another personal loan(highly doubt sufficient and cost effectiver since big amount and shorter installment period) or from family and friends.

You can forget about the repayment plan if it ever offer
It's not gonna another 30 years with housing loan interest.
Just simple maths
Based on RM100,000 / 12 = RM8,333. That one havent calculate any additional charges.
If cant handle the current payment, dont even think about the repayment offer if it ever happen.
The period is just 1-3months during the transaction period of tranferring the title from one bank to anoher bank

Yes, since no more collateral for this repayment offer.
The house already auctioned off.
Imagine for loan with collateral with 30 years repayment of low interest yet debtor not able to service, bank will not risk further.
You better off sell through agent or ownself.
Once in lelong, you are at the market's mercy.

Your property title is with Bank A.
Buyer B and Bank B will need your title to be discharged and recharge d back to them.
You cant discharge a title when there's still owing balance. Worst case the bank will use their own reserve to pay off the balance in order to proceed with process.
That's where you will get charge for interest since it uses bank own's reserve to offset your balance owe amount

Bank A.

Bank B will release loan amount based on whatever Buyer B take.
Balance between TS and Bank A, TS need to settle by themselves.
Since Bank B already done their part, Bank A need to facilitate the process in order to complete the transaction.
This is including using own reserve to payoff the balance so the title can be discharge.
However this would incur interest for TS since it's bank own money.
Thus the your hope for repayment plan aint gonna work.
It's gonna be lump sum payment TS need to pay.

TS wont able to to bargain since there's nothing to leverage anymore as the house already auctioned off.
Under risk management, no collateral means shorter period tenure and higher interest to mitigate the risk
plus with further risk of deteriorating repayment capability.

TS, the relative wish to continue to own and stay the house? If yes AKPK is one the best alternative to nego a repayment period.
However do bear in mind, once agreed, you cant miss a single payment or else it's void.

From my understanding, it seems the house is high commitment to continue stay on since dont even mind to dispose at losses.
But beware, even own selling with losses, the problem still wont go away as the differential balance still need to pay.

Simple, everything is agreed before proceed from all parties (Bank A, TS (can refer back to your own loan agreement), Auction House, Bank B)
One must understand every transaction between 2 parties will not/shall interfere another one along way.
If one notice, all this involved the most important element which is time.
All involved is clearly stated of time frame to complete the transaction within certain period of time agreed.
Failing to do so will incur financial losses which is interest which need to bare by whoever involved in the delay (usually chorology will be raise to pinpoint the culprit)

In lay man term for such situation, with court order that Bank A role is upon receiving payment from Bank B is to release title.
This is an agreement and understanding between Bank A and Bank B on auction property with court order.
Whatever shortfall. it's Bank A role to settle by using in house or third party debt collector, placing caveat on other existing asset, or file for bankruptcy action.
These are the ways to recoup back with no collateral in hand.
Imagine Bank A doesn't use own reserve to complete the transaction, Bank B wont able to charge title, Buyer B wont able to stay on the property
which eventually everything in stand still and disrupt the cycle.

Remember this is a Bank, not a property agency or developer.
They don't need your property nor they want it either. It's the transaction along the way brings the value to it.

I wish to add on another point for clarification.
This is only applicable for auction situation under court order.

For own selling property below the loan outstanding amount and need to top up to clear the balance, the bank WILL NOT help any offer any repayment loan or use own reserve to offset it.

You are digging another big hole as this would affect a lot parties.
The SPA agreement with the new buyer will be call off eventually since you are not able to pay off the remaining balance.
Lawyer fees, stamp duty, time and extra unnecessary frustration to existing problem

Don't simply make decision without knowing the consequences. Innocent parties will be affected including yourself.