Experts: Russians can expect changes in the field of mortgage housing sales

Russians, reports Interfax-Real Estatewill be able to independently sell mortgaged housing without restrictions on the amount of the loan received, if the mortgage bank did not have time to initiate the foreclosure process.

This is evidenced by the amendments to the mortgage law prepared for the second reading. This bill was introduced to the State Duma by Vice Speaker Irina Yarovaya in February 2020. Initially, the document provided that an individual would be able to independently, after notifying the bank, sell mortgaged housing if the loan size does not exceed 15 million rubles, and the bank did not have time to initiate collection of the collateral through the court. A citizen could take advantage of this opportunity if the bank began collection out of court — based on a notary’s writ of execution. The bill allocated six months for the sale, with the right of the bank and the borrower to agree on an extension of the period. The minimum transaction value was to be determined by the bank, taking into account the client’s outstanding loan obligations.

For the second reading, the State Duma Committee on the Financial Market changed the list of situations when a borrower will not be allowed to sell his or her home. These include not only the bank filing a claim in court to impose a penalty on the property, but also initiating the seizure of the collateral based on the notary’s writ of execution. Also, citizens who have been subject to judicial or extrajudicial personal bankruptcy proceedings will not have the right to independently sell, or if they previously refused to independently sell this home or did not meet the allotted deadline. In addition, borrowers themselves are not allowed to sell real estate pledged to multiple lenders.

At the same time, the deputies excluded from the document restrictions on the size of the loan: the borrower, in the absence of the circumstances listed above, will be able to independently try to sell the housing pledged to the bank, regardless of the original size of the debt. Another change for the second reading: the borrower will have four, rather than six, months to sell, but the opportunity to extend the sale period remains.

The procedure itself looks like this: the borrower notifies the bank of his intention to sell the mortgaged home. If there are no restrictions, the bank, within 10 working days, agrees on the procedure and calculates the minimum sale price, which is determined as the volume of the credit institution’s claims as of the end date of the sale period. The money from the transaction will go to the bank, and the positive difference between the sale price and the amount of mortgage debt will then be transferred to the borrower.

During the period allotted to the borrower for the independent sale of the mortgaged apartment, the mortgage bank will not be able to initiate its repossession. He will be able to do this only after the allotted time has expired.

It is expected that if the law is adopted, it will come into force 90 days after its official publication.

source: Interfax-Real Estate