State Duma Adopts ‘Mortgage Break’ Bill

UrBC, Moscow, April 19, 2019. The Russian State Duma adopted the so-called ‘mortgage break’ bill in the third and final reading this week, the Duma’s press service reports.

‘An amendment has been made to the legislation that allows to skip the notary authorization on mortgage contracts involving housing registered in the name of multiple owners. The amendment was necessary since, before it got adopted, the mortgage payers had to pay for the notary services both when a mortgage contract got signed and every single time their mortgage loan got restructured (the ‘mortgage break’ restructuring included). Now people who’ve lost their jobs, people in trying circumstances should not have to pay extra. Moreover, both the Central Bank and the banking community do not feel the notary authorization of mortgage contracts is even necessary,’ says State Duma Chairman Vyacheslav Volodin, who was one of the legislators behind the proposed bill.

The ‘mortgage break’ bill is meant to safeguard people faced with serious difficulties from losing their homes. The ‘mortgage break’ can last up to six months and can get granted to a borrowing party who’ve lost their primary breadwinner, are on temporary work disability (up to two months), acquire Group I or II disability, or lose more than 30% of their family’s overall income. The borrower can also apply for a decrease in the monthly repayment amount. The option is only available once on every loan. The loan period gets automatically extended by the amount of months the ‘mortgage break’ has lasted.

Quite importantly, the only housing the borrower has to live in cannot get seized, even if the housing in question has been used as the collateral.

The new bill applies to both future and already existing mortgages.

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