To help mortgage debtors, a draft law has been drafted by opposition liberals in Romania, whereby individuals who are unable to pay their loan installments could transfer the collateral property to the bank, thereby terminating the loan.

Banks will have no interest in lending if they do not return money

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The bill was signed by a total of 156 legislators, which is quite supportive.
Augustos Muresco, governor of the Romanian central bank, said in a statement Tuesday that the initiative was being honored. Agerpres said that the banks are not real estate agents and that the initiative, if it becomes lawful, will repeal mortgage lending, as banks will have no interest in lending if they do not return money but, for example, an apartment. According to Muresco, this initiative undermines the viability of the entire Romanian banking business.

Banks are giving out loans from depositors’ money

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He pointed out that banks are giving out loans from depositors’ money, who are expecting to get their money back at an interest rate and not wanting to have “windows, chimneys” instead, referring to the initiative of the legislators.

According to the draft, any individual may request that the property be transferred to the bank if he is unable to pay the loan installments. According to the initiators, the value of the homes now does not cover the value of the loans taken in 2007, so banks will not only take away the home from the insolvent, but may also collect other assets. In their view, risk sharing between the creditor and the creditor is thus not fair.

Financial institutions are currently selling loans

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According to the initiators, the draft also benefits banks. According to them, financial institutions are currently selling loans at a 90 percent loss, but the bill will reduce that loss to 40 to 50 percent by allowing banks to quickly take over and sell homes thanks to the accelerated procedure in the bill.
There are currently 950,000 people on the list of creditors in Romania, of whom 200,000 are mortgages.