The law on debt discharge allows retail mortgage borrowers to return real estate collateral to banks in exchange for writing off their loans.
The government-backed mortgage lending First Home program will not be subject to the provisions of the law, while the maximum ceiling which will be considered when enforcing the law will be EUR250,000.
So far, eight of Romania’s ten largest lenders, members of the Romanian Banking Association (ARB), namely ING Bank, BCR, BRD, Raiffeisen, CEC Bank, Alpha Bank Bancpost, and UniCredit Bank have decided to raise the down payment required on mortgage loans, on the backdrop of the new legislation.
According to ZF sources, Banca Transilvania is also preparing to raise the down payment on mortgage loans.
Average-sized lenders Garanti Bank, Banca Romaneasca and Intesa have also increased the down payment for mortgage loans.
Romanian Banking Association ARB said it does not intervene in the commercial policies of the member banks.
“The decisions related to the banks’ commercial activity are adopted on individual grounds based on the own strategy of every lender and on the legislative changes which affect their activity,” ARB representatives stated.