The National Bank of Romania (NBR) is doing its best to block a loophole found by banks, which are now going around the restrictions imposed by the central bank on granting home loans. More exactly, the National Bank has sent a notification to the commercial banks, recommending them to apply the new, more restrictive lending norms not only in the case of mortgage loans, but also for the home lending.
Speculating on the fact that the National Bank is referring strictly to the mortgage loans in its new norms, enforced early this month, the big players on the banking market have continued to loan money for buying, building or upgrading houses, promoting these credits as housing loans, granted under the old conditions: down payments below 25% or monthly instalments accounting for at most 35% of the loan applicant's net income.
"It is true that we have sent a note to the banks, recommending them to place under the same category both the mortgage loan, as it is defined by law 190/1999, and the home loans they offer. We have also recommended them to apply the minimal conditions accordingly, chiefly the part about granting and guaranteeing a loan, as it is stipulated under the norm 16/2004 (one of the norms that were enforced on February 1, 2004, i.e.). At any rate, we are still in the stage where we are assessing the effects produced by the measures we introduced in early February. We are aware that both banks and retailers are trying to come up with legal solutions to minimise the application of the norms we issued, but, after all, we are in a test period. Only at the end of this period, which may very well last several months, will we be able to see the exact results," National Bank vice-governor Mihai Bogza told Ziarul Financiar.
If, several weeks ago, you thought that, starting February, you would no longer be able to get a house loan unless you could come up with at least 25% down payment or if the instalments accounted for more than 35% of your income, it now seems that things are slightly different.
If you drop by the banks these days, chances are you may still find loan offers for the purchase of houses under the same terms and conditions as before. BCR (Romanian Commercial Bank), for instance, requests 20% down payment for home loans in foreign currency and stipulates that 30% of the loan applicant's net income should cover the monthly instalments. A similar offer can be found at Raiffeisen Bank, where loan officers will inform you that you can even come up with 15% down payment to get a home loan.
The bankers are convinced they are not breaking any laws. They even have arguments.
"Our loan product for the purchase of homes is tailored to the banking law and the civil code law, not to the mortgage loan law. Consequently, it does not cover the houses that will be built, only those already existent. Moreover, the interest rates are tied to the market trends and to Raiffeisen Bank's policy on interest rates, not to an index (Libor or Bubor), as the mortgage loan law stipulates. The new NBR norms are clearly about the mortgage loan, not the home loans. The National Bank has recently sent a notification to banks, asking them to modify all their home loans products in accordance with the new regulations, and we are now revising our product," says Rasvan Radu, Raiffeisen Bank vice-president.
oana.nuta@zf.ro
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