Romanian banks are planning to appeal the debt-relief law recently passed by parliament with only one vote against. They plan to ask the Constitutional Court to verify the validity of the new law. The bill allows borrowers who have defaulted on mortgages to cancel their entire debt by simply handing lenders the deeds to the property they secured mortgages for. Any shortfall between the amount of the original loan and the current market value of the secured property will be considered void, forcing banks to accept the loss.
The bill has a ceiling of €250,000 and does not apply to borrowers who have purchased their home through the country’s First Home Program.
