Another RISE in mortgage loans!!!Where it leads!!! - News about real estate, Kiev, Kyiv region. Real Estate In Ukraine
The recently published draft decree of the national Bank to toughen requirements for the establishment of banking reserves for bad loans, at first glance, the mortgage applies to a lesser extent than other forms of consumer lending. But the introduction of it in action will inevitably cause a marked increase in rates on mortgage loans.The recently published draft decree of the national Bank to toughen requirements for the establishment of banking reserves for bad loans, at first glance, the mortgage applies to a lesser extent than other forms of consumer lending. But the introduction of it in action will inevitably cause a marked increase in rates on mortgage loans.Tougher and more transparentAnother surprise real estate market was presented in the form of the publication of the draft decree of the national Bank "On amendments to the regulations on the procedure of formation and use of reserve for reimbursement of possible losses on credit operations of banks". The essence of it in the tightening of the requirements for the establishment of banking reserves for bad loans. In addition, revised the membership criteria of referring clients to one or another category of solvency. To them it is supposed to add the criterion of initial payment.In the case of the adoption of such Ordinance, all loans without any down payment, will be considered as "hopeless", as well as any unsecured loans. Those will take and loans to customers of the so-called "b" category, with an initial payment from 10% but less than 15%.In addition, to the "hopeless" will apply to loans with arrears greater than 60 days (today вЂ“ from 91 days), even if they. As you know, all the "bad" loans according to the norms of the NBU require 100% redundancy.On the proposed draft regulations on late payments on 11-20 days, the reserve ratio will be 60% (instead of 40%) and even for the ideal case of the so-called "standard receivable" he will rise from 2% to 4%.Sufficiently tough Central Bank initiative connects specialists with significant growth in bad debts of banks on consumer loans. According to Vice President of business "personal Finance" Diamantbank Anna Tkachenko, "superheated" the rapid growth in the number of consumer loans granted in the banking sector required an adequate intervention of the regulator.One of the major motives can be considered anti-inflationary aspirations of the national Bank, as rising prices in the country are largely triggered by excessive availability of consumer loans.In the first place changing the rules will affect the most popular and inexpensive forms of consumer lending. "To a lesser extent the decree of the NBU will affect the issuance of mortgage loans," says Anna Tkachenko. - As a rule, all banks require making an initial payment. Currently, only a few banks offer housing loans with no down payment. However, to avail this offer available only to those customers who are on bail will not only give directly to the mortgaged property, and another property".However, a significant tightening of financial position of banks, reducing their activity and the change in credit policy will inevitably impact on the dynamics of the rates of mortgage lending.In addition, there is innovation, which will directly affect those who will take out a loan secured by real estate: the NBU will oblige banks to demand from customers written consent to the provision of information by the Bank on the borrower in the credit Bureau. Anyone who refuses will be classified in the worst category of customers, the loan for which for banks will be the most costly and problematic.Loans will go upIn connection with the upcoming changes, bankers do not expect. For themselves or for their clients."Any tightening or administrative regulation risk policies and standards of redundancy leads to lower yields and, consequently, to increase the cost of credit," says the Head of retail business FUIB Valery Patsuy. Therefore, the adoption of this resolution by the National Bank of Ukraine can not affect the terms of lending".Given the fact that the diversion of funds to reserves will reduce the profitability of productive assets, as it directly reduces ROA and ROE, the banks will need to compensate and they will be forced to raise interest rates on loans, the expert believes."The NBU's resolution, the draft of which was published, in our opinion, could trigger an increase in interest rates on consumer loans in the range of 2 to 5 percentage points in UAH and 1 вЂ“ 4% in US dollars and euros.Exactly how much rates will increase вЂ“ it will be clear in September and October, when it will come into force this decree of the NBU, and finally clear up the situation with the exchange rate of the dollar against the national currency," - says Anna Tkachenko.According to experts, the future tightening of regulations of the national Bank will have a negative impact on the status and development of the domestic banking system."First of all, banks will no longer offer consumer loans with no down payment or cost of such loans will increase significantly. The increase will affect the cost of unsecured consumer loans. This will lead to lower demand for loans, and, as consequence, to reduction of lending and reduce the growth rate of the banking system as a whole," predicts Director of Department of retail business of MB Bank Natalia Baidakova.The complication of working conditions and the slowdown in lending may cause the withdrawal of some banks from the consumer credit market. And those who leave and those who remain will be forced to compensate their losses due to the tightening of conditions, including, and mortgage lending. Therefore, we should expect growth rates on mortgage loans about the rate of such growth for other types of consumer lending.A breath of optimismOn the other hand, among the experts is enough positive feedback about the draft resolution of the national Bank. So, it is noted that the expected tightening of the rules will reduce the purchasing power of the population, which will help to stop or slow the growth of prices. Including вЂ“ and the real estate market.In addition, against the backdrop of unfolding in the West Bank crisis caused by the mortgage crisis, not to be taken seriously and preventive value of the expected measures."Certainly, if adopted by resolution of the NBU will not in fact be different from published June 20 project вЂ“ we can talk about effective intervention of the national Bank. Sure, thus able to prevent a crisis such as happened in the U.S., " says Anna Tkachenko. Despite the critical importance of the banking sector of this normative legal act, its adoption will be felt first of all potential borrowers. In conditions when the demand for loans exceeds the offers вЂ“ banks primarily will increase the so-called "securitization" of loans. Ie.