The default of the borrower and who pays for it?
Analytics | Mortgage | Legislation
Financial University under the Government of the Russian Federation issued a sad evidence of how much still must banks bankrupt mortgage borrowers, and told them how to develop further relations with creditors.
The research team of the University, headed by Doctor of Economic Sciences Alexander Tsyganov based on an analysis of information provided by the banks, came to the conclusion that the majority of bankrupt borrowers who are forced to sell the mortgage apartment, as a result, taking into account costs, fines and penalties remain must creditors an amount equal to approximately half of the previously issued loans.
Thus, people are not only deprived of the apartment, down payment, paid for it, the amount spent on maintenance and repair of housing as well as the money that had been made to the bank as repayment of principal and interest, but remains debtor.
The question of how this is true it is not necessary - anyone who takes a mortgage must assess the risks. The main question is what to do, so that when a person is deprived of an apartment, he did not continue to bear the burden of the mortgage?
The answer to this question is "Rossiyskaya Gazeta", which recalls that the borrower has the opportunity to insure their financial risk, that is, in the case of personal bankruptcy, to shift the obligation to extinguish the debt on your insurance company. And then the journalist of the newspaper explains why this mechanism, which works successfully in the West, it is not effective in our country.
Global three reasons. The first - a prohibitively high cost of such insurance. In terms of percentages, it can easily raise the rate on the loan at 1 - 1.5 points. At the same time, according to the journalist, "Rossiyskaya Gazeta", the high cost of insurance against risks of financial failure is not due to the high probability of payments on it, and the special relationship between banks and insurance companies. This is the percentage of the commission that insurers have to pay the bank for the right to sign the agreement. It varies at 40% - 45%.
But it would be nothing, and borrowers to insure their risks, if they had a guarantee that the occurrence of financial disasters, the insurance company will pay to the bank. There are no guarantees, and even such a practice - a rarity. In fact, insurers are paying exorbitant rates to banks 'forced' to deny brooked defaulted citizens.
The third reason that default insurance in this country does not work, is conflict-judicial practice of obtaining insurance. In most cases the borrower has to go to court and prove that their financial insolvency, he does not pretend.
According to "Rossiyskaya Gazeta", the system of insurance against default of borrowers to work, you must take a series of legislative regulations. In particular, as is done in the United States to issue a ban on commissions beneficiaries, with which in this case are the banks, because the insurance of personal financial liability of the borrower get their money back guarantee.