The Central Bank pointed out the risks that may accompany the practice of Russian banks of limiting the issuance of preferential mortgages. Previously, large lending institutions announced plans to issue mortgages under government programs only if they bought homes from their partners.
The Central Bank believes that the commission charged by banks to associated developers can be transferred to the cost of the home. They noted that this approach contradicts the basic principles of competition and increases the segmentation of mortgage lending.
“Rates could end up being passed on to prices by developers, widening the price gap between the primary and secondary real estate markets. This entails risks for mortgage borrowers,” the Central Bank said in a comment cited by RBC.
In January, the Federal Antimonopoly Service received several complaints against Russian banks regarding their intentions to introduce commissions for promoters. Its promoters pay banks so that clients can obtain a mortgage for the purchase of a home only from companies associated with the financial organization. The commission itself allows the interest rate to be reduced.
VTB, Alfa Bank, Otkritie, Sberbank and Promsvyazbank began to master the new approach.
The Central Bank intends to monitor the accuracy of banks’ assessment of the fair value of mortgage collateral. The regulator also approached the state corporation Dom.RF with a proposal to revise the limits on granting state-supported loans.
Starting March 1, updated and stricter requirements for the issuance of mortgages will come into force. Mortgage risk premiums will increase.
Author:
Natalia Gormaleva
Source: RB
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