“The new law, as I see it, will have to focus exclusively on social cases. I really believe it is possible to make a law that would not be applied retroactively, that would focus on future loans and social cases. At the same time, the client should only have one home and live there, with a value of up to EUR100,000, and should benefit from the provisions of the law only once, without applying to investors,” Lhotte stated.
BRD general manager said that the bank can come up with new products based on the debt discharge law, tightening eligibility conditions, especially those related to the down payment and interest, but without modifying the conditions for the rest of the clients and products.
As for the current version of the giving in payment law, Lhotte says there are several unfavorable effects that will materialize if the law is approved, supporting profiteers, not individuals.
Thus, the government-backed mortgage lending First Home program will be cut off, while the population’s access to loans will be hardened, as the down payment will have to be considerably higher, and banks will increase interest costs as they will have to face greater risks.
At the same time, real estate investors will be discouraged to build new homes following the decrease of apartment prices triggered by the impact of the giving in payment law, which will be subsequently translated into a moderate GDP growth and less jobs.
In 2015, BRD registered a non-performing loan ratio of 3.1% on the segment of real estate loans for individuals.