The government plans to adopt a draft amendment to the banking law, assuming that if the bank charges additional fees or commissions related to awaiting an entry in the land and mortgage register, the fees or commissions charged on this account will be charged after the mortgage has been entered, will be reimbursed or set off against other receivables owed by the borrower, according to the list of legislative and program works of the Council of Ministers.
The adoption of the draft by the Council of Ministers is planned for Q2.
The draft act amending the Banking Law provides that in the event that a bank charges additional fees or commissions related to awaiting an entry in the land and mortgage register, a mortgage established for the benefit of that bank securing the repayment of a loan granted to a consumer, entry of the mortgage, were subject to reimbursement or set off against other receivables owed by the borrower.
As a result of the proposed regulation, the consumer will not bear the risk related to circumstances beyond his control, as well as the risk that has not materialized. In a situation where the court makes an entry in the land and mortgage register and the bank receives security for the granted loan, the borrower will receive a reimbursement of the fee (settlement of fees incurred by the customer due to increased costs while waiting for the entry).
Due to the fact that the mortgage securing the loan taken for the purchase of real estate is awaiting entry in the land and mortgage register, banks charge borrowers with additional costs. In the opinion of the banks, such action is justified by the fact that until the mortgage is entered in the land and mortgage register, they bear an increased risk related to the lack of sufficient collateral for the loan repayment. In practice, however, in almost every case the mortgage is entered in accordance with the application and the event assumed by the banks, which was to justify the collection of a fee of an extraordinary “insurance” for credit risk, does not occur.
Therefore, since the risk justifying the additional costs has not materialized, these costs, such as extraordinary and security in nature, should be reimbursed to the borrower or credited to his contractual loan obligations.
Source: ISBnews
