The study shows that Romania has no strategic public policy in the dwelling sector and that the law adopted Tuesday does not positively impact the dwelling conditions for vulnerable categories (young families) but could lead to a crisis for approximately 100,000 people with mortgage loans who could opt for returning the real estate to the bank after the law is adopted.
According to the study, the real beneficiaries of the law and of the new ceiling of EUR250,000 stipulated by law are nearly 1,500 customers with loans of over RON1 million, guaranteed with properties acquired during the real estate boom, who find it more profitable to get rid of these investments than pay the debts to the banks.
As a matter of fact, the average value of a mortgage loan for the acquisition of a home in Romania is EUR37,000, sevenfold lower than the ceiling stipulated by the law.
The legal committee of the Chamber of Deputies on Tuesday adopted the law on debt discharge, deciding that the government-backed mortgage lending First Home program will not remain subject to the provisions of the law, while the maximum ceiling to be considered when enforcing the law will increase from EUR150,000 to EUR250,000.
According to the law on debt discharge, retail mortgage borrowers can return real estate collateral to banks in exchange for writing off their loans.