Bankers are getting ready to announce cuts in the minimal down payment they require from those taking out a real estate loan, without waiting for the regulation of the NBR lifting the restrictions that have capped lending over the last few years to come out first.
Alpha Bank announced on Friday night that it would require a down payment of no more than 15% for mortgage credits compared with the at least 25% at the moment. Banca Transilvania launched a real estate loan of up to twice the value of the building pledged as security last week without requiring the client to make an upfront payment, either.
Volksbank, a very aggressive player on the retail market in turn is getting ready to modify lending terms, and is therefore considering a cut in the down payment required for real estate loans, among others.
The Greeks at Alpha Bank, who were some of the real estate loan pioneers in 2001 are now announcing they are willing to drop the down payment completely, if the evaluated value of the building is higher than its acquisition value. Sergiu Oprescu, chief executive of Alpha Bank, feels that clients will no longer need "substantial savings" to take a loan under the new terms. Oprescu had been sceptical about completely dropping the down payment for mortgage loans in the past, arguing that such a policy would leave the bank vulnerable to possible price adjustments on the real estate market. Robert Rekkers, chief executive of Banca Transilvania, said at the launch of the new loan last week that he expected the down payment on real estate loans to go down to an average of 10-15%.
Both Alpha Bank and Banca Transilvania will apply the new lending terms once the new regulations of the NBR come into force.
Volksbank is discussing the change of the lending policy today, and is considering introducing several tranches for the down payment on real estate loans, says Alin Merer, the bank's marketing manager.
Meanwhile, the official document that relaxes regulations on crediting to individuals has gone through all the necessary steps through the NBR and should reach the Official Gazette for publication today.
The members of NBR's Board of Governors on Friday signed the new Regulation on lending to individuals, which abrogates guidelines 10/2005, and 20/2006.
These guidelines made it mandatory for lenders to require a down payment of at least 25% for real estate investment loans. The indebtedness of the customer (total commitments deriving from loan contracts in the monthly net income) was not allowed to exceed 40%.
The new Regulation will enforce three days from publication in the Official Gazette. It usually takes a few days up to a week from the day a document is sent for publication in the Official Gazette until it is actually published.
"The new regulation will bind banks and non-bank financial institutions to devise their own internal regulations, which will be approved by their respective management and validated by NBR's Supervisory Department," Adrian Vasilescu, advisor to the NBR Governor was quoted as saying by Mediafax.
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