Thunderstorm of the 2000s – Newspaper Kommersant No. 172 (7373) of 09/17/2022
[ad_1]
The Central Bank raised the problem of “zero” mortgage rates, widely advertised by market participants, but misleading customers. The decrease in the interest rate to almost zero is due to the increase in the price of real estate. As a result, the bank receives both commission income and a significant margin, and the developer increases sales. But overvaluation of housing distorts the value of collateral, which increases the risks of banks in the event of defaults by customers. The Central Bank is going to take measures that can be expressed in the order to disclose more fully the cost of the loan and even the imposition of a fine.
On Friday, September 16, at a press conference following a meeting of the Board of Directors of the Central Bank on the key rate, the head of the regulator, Elvira Nabiullina, raised the problem of mortgage rates close to zero (see. “Kommersant” from September 16). Rates of 2-3% per annum, and sometimes significantly lower – up to 0.1% per annum (with average market rates of 10% per annum, according to Dom.RF (.pdf)) are usually provided as part of partnerships between banks and developers and are actively used in advertising. According to Ms. Nabiullina, “this is purely a marketing ploy, very often associated with the fact that people buy an apartment at an inflated cost, and then, at the expense of this inflated cost, the developer shares a one-time compensation with the bank.”
The head of the Central Bank called the “zero” rates misleading customers and warned that the regulator intends to take action, although she did not specify which ones.
“Such actions and cooperation between developers and banks take place at the moment when the developer’s sales fall or, in general, for revival,” notes Vadim Pakhalenko, Director of the Retail Business Development Directorate at TKB. And “mortgages from developers” began to appear in 2015. At that time, the preferential mortgage state program was not launched, and market mortgage rates soared to 20% per annum, and sales from developers stopped.
However, there is a rate at which banks want to receive payment on the loan. For example, when paying a commission of 20% of the loan amount, the client can receive a rate of 0.1%, Vadim Pakhalenko points out. But clients do not have that kind of money at the entrance to the mortgage, developers have it, but in the end everything happens at the expense of the client through an increase in the price per square meter. At the same time, the commission itself can be paid by the developer from the funds within the framework of project financing, explains the interlocutor of Kommersant from among the developers. It indicates the funds that the developer spends outside the construction site, including remuneration to the bank, he explains.
According to Yuri Chernoivanov, Deputy Financial Director of the Granel Group of Companies, banks work with developers in a range of financial services: project financing, mortgage lending and other areas, and financial organizations can compensate for lost profits on some items at the expense of income on others.
The concern of the Central Bank is quite understandable: because of such projects, the volume of overvalued collateral in banks in mortgage portfolios increases significantly due to the premium on the cost of housing from developers, says Sergey Mazurik, an expert on the mortgage market.
“There is a risk of a mortgage bubble forming in the real estate market. If the borrower defaults, then after the sale of such an apartment, the bank may not have enough money to compensate for losses on the unpaid loan,” he says. In addition, such projects are being implemented in the primary market, and the cost per square meter is currently higher than in the secondary market, which affects the increased cost of all apartments in the real estate market, the expert notes.
Meanwhile, mortgage programs at 0.01% confuse buyers and force developers to spin the flywheel of such promotions, says Kommersant’s interlocutor in one developer company. “The client sincerely does not understand why one developer has such a “favorable free mortgage”, while another has a more interesting project, but the mortgage is “expensive,” he says. As a result, developers are forced, following the major market players, to “draw 0% in advertising to attract customers,” he says.
Lawyers point to the possibility of administrative punishment. In such cases, we are talking about misleading consumers of financial services, says banking lawyer Nina Semina. The buyer is not informed of all the costs and expenses that he will incur, while he sees an interest rate that is obviously lower than the average market, but as a result he receives property at inflated prices. Whereas the client could have purchased a home at a higher rate, but at a lower cost, and in aggregate the costs could have been lower. According to the lawyer, misleading the consumer can attract not only the attention of the Central Bank, but also the Federal Antimonopoly Service. In this case, such misselling can be regarded as improper advertising, she clarifies. Fines can be one of the penalties, but the regulator has a wide arsenal of influence on market participants. For example, she believes, the Central Bank may require banks to indicate to customers before signing the contract the full cost of a mortgage loan, taking into account the full value of real estate. Compared to average rates, this will make the client think about whether to go for such a low interest rate. If banks are required to disclose this information to customers, it may not be necessary to resort to administrative action, Ms. Semina admits.
[ad_2]
Source link
