Tamweel, the UAE's largest home lender by volume, may become the first to sell repossessed properties once the legal process is complete.
Legal uncertainties have made mortgage lenders reluctant to hold forced sales or auctions in the past, as the system has never been tested.
Instead, lenders have negotiated with distressed mortgage customers to try to recover some capital and avoid costly legal proceedings.
Wasim Saifi, the chief executive of Tamweel, said the Islamic lender would 'move to the next step of disposal of properties once the legal process of foreclosure is completed'. Saifi said Tamweel 'had started the process of foreclosure for a few customers'.