“It will allow to get out of a difficult life situation”: the law on mortgage vacations came into force in Russia

On Wednesday, July 31, the law on mortgage vacations for borrowers who find themselves in a difficult life situation comes into force in Russia. The new rule provides relief for this category of persons: loan payments may be reduced or terminated altogether, while the bank will not apply penalties. At the same time, according to the text of the law, the grace period should not exceed six months.

To receive benefits, several conditions must be met. So, the borrower should have only one room suitable for permanent residence. In addition, it is necessary to provide evidence that the provisions of the contract have not been modified at the request of the borrower. Also, the borrower must be in a difficult life situation.

Circumstances that can be considered as a “difficult life situation” are also spelled out in the law. These include loss of work (in this case, the citizen must provide proof of registration on the labor market, recognition of the borrower as a disabled person of group I and II, and temporary disability for two or more months.

Benefits are also provided to borrowers, whose average monthly income for two months before circulation has declined by more than 30% compared with income for a year before the time of circulation. In this case, the size of the average monthly mortgage payments should be 50 percent or more of the borrower's average monthly income.

The last category of people to whom benefits will be available will be those who have increased the number of dependent people (minors or disabled people of groups I and II). At the same time it is necessary that the total income of the borrower decreased by more than 20%, and mortgage payments began to exceed 40% of the average monthly income

Such a suspension of payments will not affect your credit history and will not be considered an overdue credit; earlier loans will also be subject to the law. The government also has yet to determine the maximum loan amount for which you can ask for a deferment, but so far it is set at 15 million rubles.

It is noted that the delay can be provided for one loan only once.

President's initiative

On the need to conduct mortgage vacations, Russian President Vladimir Putin spoke in his message to the Federal Assembly in February. According to the head of state, citizens need to be provided with legal support mechanisms in the event of life difficulties.

“Today, many citizens take consumer loans for various needs. But in life everything can happen - both illness and job loss, - the president noted. - But in this situation to drive a person into a dead end is the last thing. To protect people, additional legislative guarantees are needed. ”

Putin emphasized that it is important for a borrower to “save his only housing.” This was taken into account in the law, which prohibits the withdrawal of housing during the mortgage holidays.

Such a measure would be particularly relevant in connection with the common practice of banks to take property from borrowers for non-payment of contributions, said Vladimir Gutenyov, deputy chairman of the Duma committee on economic policy, industry, innovative development and entrepreneurship.

“Often banks, with great pleasure, impose penalties that imply that the mortgaged property, the mortgage apartment, is transferred to the creditor bank. Moreover, now there is a slight increase in the value of real estate, and, as a rule, the loan amount correlates with the price of the object. This law will allow thousands of families of Russians to get out of a difficult life situation, without losing either the money they contributed as a down payment, nor housing for which they are calculated and a significant part of the borrowed money for which they paid, ”he says.

Debt situation

In recent years, mortgage debt in Russia has been growing along with the number of loans issued. As of June 2019, the total debt amounted to 6.9 trillion rubles, while the volume of overdue debt was at the level of 63.7 billion rubles.

However, the adopted law is not a measure to combat the over-indebtedness of the population, believes Yuri Tverdokhleb, an associate professor at the Department for Regulation of Financial Institutions, at the School of Finance and Banking at RANEPA.

“Objectively, this law will create additional favorable conditions for servicing loans, especially for people who find themselves in some difficult life situations. The adoption of this law is completely justified, moreover, I am sure it is not a response to the debt load, which many people in federal ministries and the media are talking about now. This is a completely normal procedure for borrowers of any country, ”said the expert.

Reliefs from the state will ultimately have a positive effect on the economic situation in the country, says Elena Ivankina, Dean of the Faculty of Real Estate Economics at the Institute of Branch Management of the RANEPA.

“It is difficult for the bank because it will not receive interest on the loan over this period, but I think that as a goal for attracting new borrowers such a rule would be very useful for the economy,” she says.

In addition, from August 1, the law enters into force, according to which the material benefit received by the subject during the mortgage holidays, he is exempt from the payment of personal income tax (PIT).