The legislation on mortgage contracts. Federal Law on Mortgages and Real Estate Mortgages
In order to get acquainted with the latest changes in mortgage lending, you should carefully study the law on mortgages; the current version of 2020, which carries some innovations.
Now we will consider all the nuances that relate to this regulatory document, also from the article you can find out some subtleties of the mortgage lending process.
Any activity in our country is regulated by laws. Mortgages were no exception - for those who plan to obtain a mortgage loan for the purchase of housing, first of all, you should familiarize yourself with Law 102 - FZ.
Summary mortgage law looks like this:
- The first chapter defines the main provisions of the law relating to the object of the pledge, as well as the obligations of the parties to the mortgage registration process.
- In the next three chapters ( 2 to 4) of the law is described content of a mortgage agreement and mortgage. It also outlines the requirements for state registration of a mortgage agreement.
- Fifth and sixth chapters define the possibility of transferring rights to collateral mortgages to third parties.
- Chapters 7 and 8 the law devoted to assignment of duties on mortgage and collateral.
- The next two chapters describe fines and penaltiesprovided for non-compliance with the conditions of mortgage lending.
- Mortgage specifics for various types of real estate are described in chapters 11 through 13.
- Final information on Mortgage Act 102-FZ is in its last 14th chapter.
According to this law, banks are engaged in mortgage lending.
The entire legislative base of the country, at the slightest change in the political or economic sphere, is very often reviewed. The latest version of Law 102 of the Federal Law on Mortgage (Real Estate Mortgage) was adopted in 2015, but before that, the world saw 16 of its bills.
The latest edition of the Federal Law "On Mortgage".
Much of this legislation is written in a dry legal language, therefore we will try to convey to ordinary citizens what the law is about.
The main tenets of the law on mortgages
Federal Law 102 FZ gives a clear definition of the term “Mortgage”: it is the lender’s right to receive from the borrower a refund of his money for the amount of which the mortgage was issued.
The right to use pledged real estate, along with this, remains with the pledgor.
Mortgage Requirements Indicated by Law
This section of federal law very often spelled out in bank mortgage agreements, in the part where the amounts of compensation are determined:
- When applying for a debt collection, the mortgagee can count on the bulk of the debtrelevant at the time of treatment.
- Compensation of accrued interest for loan servicingaccording to the loan agreement.
- Payment of penalties and forfeitsarising as a result of non-compliance with the terms of the contract.
- Compensation for litigation expenses.
- Compensation of expenses related to the sale of collateral real estate.
Mortgage debt collection scheme.
Section of the Law on Collateral
This part of the law regulates the pledge and gives a definition of what can be attributed to it.
According to this provision mortgage pledges include:
- Residential real estate, namely houses and apartments.
- Land.
- Industrial property.
- Cottages with buildings and without.
- Vehicles.
- Garages.
- Real estate under construction.
- The right to lease.
- Equity in housing.
Greetings! In this post we will examine the federal law on mortgage mortgages. You can download the current version of the law for 2020, find out the latest changes, the history of the document, as well as expert commentary on the main articles.
For 84 years of the 20th century, there was no mortgage in Russia. The authorities of the USSR from the very beginning of their regime deprived the country's population of the right to private property. Mortgage under the new rules in Russia appeared only at the end of the 20th century. For its development to its present state, radical changes were required in the state's attitude to property relations and housing construction. In addition, major legislative changes were required.
Only on the eve of 1991 did the first prerequisites for the revival of the mortgage institution in Russia appear. This was the Law on Property, adopted in December 1990. Then, until 1993, laws on collateral and on the principles of housing policy were successively passed. The main provisions are also enshrined in the Civil Code. They began to recall real estate mortgages more and more often.
These laws allowed dozens of banks to establish a system for issuing mortgage loans by the end of 1994. However, this business was poorly controlled by a meager set of regulatory frameworks in this area, which did not allow the mortgage to reach a high level of development and transparency. A fundamentally new and powerful federal law was required.
It was adopted on July 16, 1998, a month before the worst crisis in the Russian economy. 102 Federal Law for mortgages has become a kind of bible, which together with the civil code made it what it is now.
Recent changes and current version of the law
For almost 20 years, multiple adjustments have been made to the mortgage law related to the development of mortgages and changes in other regulatory documents. The revision of July 3, 2016 with the amendments of 07/01/2017 is now relevant.
The most important events of the mortgage market in 2016 that affected mortgage legislation were:
- Legislative restriction of the amount of the penalty for late repayment of the loan (should not exceed the key rate of the Central Bank on the date of conclusion of the loan agreement).
A few words about the key rate of the Central Bank. In simple words, this is the interest rate at which banks take short-term loans (1 week) and open the same maturity deposits in the Central Bank. Starting May 2, 2017, the rate is 9.25%.
- Mandatory notarization of transactions with real estate that is in shared ownership.
That is, now in order to sell an apartment divided by shares, it is not enough to conclude a purchase and sale agreement in simple written form. It is necessary to visit a notary public and formalize the transaction in its form. Accordingly, the cost of registration has increased significantly.
- Changing the procedure for calculating tax on the sale of an apartment. Since 01/01/2016, the period of ownership of the property has increased, after which the owner is exempt from paying sales tax from 3 to 5 years. In addition, now the tax amount is calculated from the cadastral value or from the value specified in the sales contract, whichever is greater. That is, undervaluation transactions in the contract have lost their meaning, since the cadastral value is approximately equal to the market value.
There is good news. If the ownership is registered before 01/01/2016, the period remains the same - 3 years.
Example. Citizen Ivanov purchased an apartment worth 3,000,000 rubles. in April 2016. In May 2017, he sold it. Cadastral value - 3,000,000 rubles., Under the contract of sale / purchase - 1,000,000 rubles. The tax will be calculated on the basis of the cadastral value in the amount of 2,000,000 rubles. (minus the tax deduction of 1 million) and will be equal to 260,000 rubles.
- Another good news for borrowers under the Military Mortgage Program. Now, information on such agreements will not be taken into account in the credit history of a serviceman. In fact, he himself does not pay the loan. The state does it for him.
- Since July 2016, the law spells out the right to pawn car spaces.
General Provisions
The basic provisions of the law on mortgages enshrined the definition of a mortgage, the basis for its occurrence, a description of the requirements for collateral and property that can be transferred as collateral.
A pledge must necessarily be fixed by an agreement in which there are two parties: the pledgor (owner of the object) and the pledge holder (creditor). Moreover, the owner may not have anything to do with credit, but only provide him with his property.
The mortgage itself is established not only under the loan agreement. It could be:
- loan agreement,
- lease contract,
- work agreement,
- an obligation based on a contract of sale, etc.
That is, any obligations, if they are not covered by a security procedure specified by another law, may be subject to a mortgage.
The contract establishes a complete list of obligations that are covered by a pledge. If something goes against the agreement, the pledge holder also has the right to receive compensation for losses, interest for the misuse of his funds, as well as legal costs and expenses for the sale of the mortgaged property, provided that otherwise is not specified in the contract. That is why it is so important to correctly compile this document.
The following property may be pledged:
- land plots, but not all (exceptions are described in article 63 of the law);
- property used for business;
- residential buildings (including parts consisting of isolated rooms);
- cottages, garden houses, baths, garages and other consumer buildings;
- ships (air, sea, river) and even space objects;
- car place.
The basic principle that applies to collateral is indivisibility. That is, part of the property, which alone, after dividing in kind, cannot be used for its intended purpose, is not accepted as collateral. Simply put, you cannot lay only the engines of an airplane, or just the roof of a house.
Another important point is that a residential building on a land plot can be accepted as collateral only together with the land. If the plot is leased, then the lease right is laid. At the same time, with the term of the contract with the lessor for more than 5 years, the owner’s permission will not even be required.
Mortgage agreement
The general rules for concluding all civil contracts in Russia are enshrined in the Civil Code. The mortgage law introduces additional requirements that must be met.
The following information must be indicated in the contract:
- subject of mortgage and its assessment;
- nature, scope and term of fulfillment of obligations.
The subject of the pledge must be described in detail so that it can be accurately identified. The name of the object, description and location are recorded in the contract. In this case, the same rules apply to the leased property, additionally indicate the lease term.
If necessary, the parties can include in the contract the procedure for the sale of collateral in case of debt collection in court or describe options for settlement in the pre-trial period.
When it comes to a mortgage loan agreement with an individual who purchases real estate not intended for entrepreneurial activity, the norms described in the Law on Consumer Credit apply to him. That is, the following conditions must be met without fail:
- The contract indicates the full cost of the loan, and it is mandatory on the first page.
- The lender is forbidden to charge the borrower fees for actions that are assigned to him by law and which he does in his own interests (all kinds of fees for issuing a loan and other payments not related to a mortgage).
- The conditions and procedure for issuing a loan should be placed in the public domain for review (including on the Internet).
- The borrower must be given a payment schedule.
Mortgage
A mortgage is a registered security in which the right of the pledge holder to the pledger to fulfill obligations and the right to pledge property are secured. The law does not have a mandatory requirement for its availability to conclude a mortgage agreement. It may not be.
The document is prepared either by the mortgagor or, if the property belongs to a third party, by both of them.
The law clearly describes the list of information that should be reflected in the mortgage, as well as the obligation to register the paper with a state body (for example, Rosreestr). If at least one of the points listed below is not met, a mortgage cannot be called such:
- The word “Mortgage” must be indicated in the title of the document.
- For individuals - the name of the pledgor, data of an identity document. For legal entities - the name of the organization and location.
- For the pledge holder the same details as in clause 2.
- The same details of the debtor, if he is not a mortgagor.
- The date and place of conclusion of the contract, as well as the grounds for the occurrence of obligations (for example, the number of the loan agreement).
- The amount of liabilities and interest, as well as the period of their performance
- Name, description and location of the subject of the pledge.
- Confirmed estimated property value.
- Mark on state registration of a mortgage.
- Indication of the presence / absence of encumbrance of property with the rights of third parties.
- Signature of the mortgagor and the debtor (if it is not the same person).
- Indication of the date of transfer of the mortgage to the creditor.
The mortgage may be assigned to a third party. Then the requirements of the new pledge holder will be based only on the information reflected in the paper.
A lost mortgage can be restored by making a duplicate, about which a corresponding mark is made on it.
Upon repayment of obligations to the creditor, the mortgage is returned to the mortgagor, who then removes the encumbrance from the property in the state agency.
Mortgage registration
Mortgages by virtue of the law must be registered with Rosreestr. In addition to the Law on Mortgage, this process is regulated by Law No. 218-ФЗ On State Registration of Real Estate.
State registration formally consists in recording a transaction in the Unified State Register of Real Estate.
The basis for registering a transaction is a joint application of the mortgagor and the mortgagee, or based on a statement by a notary who has certified the contract.
The registration of a mortgage by virtue of the law is carried out with the simultaneous registration of the ownership right of the person whose rights are encumbered. If available, a mortgage is registered.
Preservation of mortgage property
The principal point is that the pledge of property does not give the creditor the opportunity to limit the right to use the pledgor of this property for its intended purpose. He also has the right to benefit from the collateral, while the creditor cannot claim this income.
At the same time, the mortgagor is obliged to keep the property in good condition and, if necessary, carry out repairs at his own expense, unless otherwise specified in the contract.
Often disputes arise regarding the legality of a creditor’s claim to insure collateral against damage, damage or loss. The law states that such insurance may be provided for by the terms of the loan agreement. As a rule, property is insured at the expense of the mortgagor.
In addition, the owner is obliged to take all available measures to preserve the property safe and sound and to inform the pledge holder if there is a real threat of loss of the pledge.
Subsequent mortgage
The subsequent mortgage consists in the re-pledge of the already mortgaged property. This may be a pledge to the same creditor (for other obligations), or to others.
It is important to comply with the terms of the original mortgage agreement. If it contains a direct ban on subsequent mortgages (and most housing mortgage agreements do), then such a transaction will be declared invalid regardless of whether the potential mortgagee knew about it or not.
There are also cases when the contract specifies the requirements for registration of a subsequent mortgage. In this case, a new contract must be concluded subject to these conditions.
Otherwise, the subsequent mortgage differs little from the current one. Particular attention should be paid only to the collection procedure. Here it should be guided by the rule of priority rights of claim, in accordance with which the repayment of obligations in turn is carried out, starting with the first creditor. So the last lender may not have enough money from the sale of property.
Assignment
The pledge holder has the right, at his discretion, to transfer the right to demand the performance of mortgage obligations to any third party. For example, if a bank wants to transfer the security of a third-party organization, it does not have to have a license to carry out mortgage lending.
At the same time, the person to whom the right to mortgage has passed receives the rights to the obligation secured by a pledge. That is, this person takes the place of the original creditor.
Mortgage transfer is made by concluding a contract in a simple written form. A security entry must be made on the new pledge holder.
Interestingly, the law expressly prohibits making notes on the mortgage on the prohibition of transferring it to third parties. Such a record is a priori null and void.
Recovery
If the debtor fails to timely and incompletely repay his obligations, thereby violating the terms of the contract, the creditor has the right to initiate a forced collection of debt.
There are two ways of development of events:
- trial;
- extrajudicial recovery.
If the mortgage agreement does not provide for the possibility of an out-of-court settlement of the debt (introduced by Section 55 of the Law) by collecting the pledged property, such collection is possible only by a court decision.
There are two cases in which non-judicial recovery is not possible:
- The period during which the debt is not repaid (delay) does not exceed 3 months.
- The balance of the debt is less than 5% of the debt.
In practice, debt collection by banks through the sale of mortgaged property occurs only in extreme cases, when other methods do not bring the proper result. However, do not forget that the law in such cases, as a rule, is on the side of the creditor, since the concluded mortgage agreement is violated by the debtor. Therefore, if it comes to extreme measures, it is possible to sell the mortgaged property to repay the debt.
Realization of property
Property of debtors is sold by public auction in the form of an auction. Its organization and conduct are not regulated by this law. The procedural legislation and the Civil Code are responsible for this.
In general terms, bidding is conducted as follows. Not earlier than 30, but not later than 10 days before the auction, an announcement is posted in the official newspaper with information about when, where and what will be put up for auction.
Those wishing to participate must make a deposit in an amount not exceeding 5% of the initial sale price of the object. The winner is the one who offered the highest price. The rest of the deposit is returned immediately.
On the day of bidding, a protocol is signed with the winner. The decision is valid for 5 days, during which the buyer pays the rest of the value of the property, after which, again, within 5 days, the contract of sale is concluded with him.
Extrajudicial sale of property takes place according to a similar scheme with the only difference being that the auction is organized by an authorized person on behalf of the pledge holder. The amount received from the sale is distributed among all pledge holders, and the balance is returned to the pledgor.
The law also states that the lender may reserve the property for himself if this is referred to in the contract. The debtor may at any time, before the announcement of the auction closed, stop the collection by paying off the debt.
Bidding may be declared invalid if only one buyer came to them, the initial amount was not increased, or the winner did not pay for the property. By the way, for the latter, the Civil Code provides for liability, which is expressed in damages.
Features of mortgages on land
A mortgage of land plots is possible if the turnover of such objects is not limited by law or its size exceeds the minimum value established by regulatory enactments for plots of this kind and purpose.
Pledges may be provided to land plots that are in municipal ownership. But there are conditions:
- the site should be allocated for individual housing construction as part of social programs;
- mortgage should be associated with obtaining a loan for the arrangement of this site;
- the decision on the possibility of a pledge is taken by the municipal authority.
A land plot acquired at the expense of credit funds shall be pledged from the moment of registration of the right of ownership. If the owner wants to build any buildings or structures on the ground, he does not need to ask permission of the pledge holder. Only, if this does not contradict the contract, will these buildings also become the subject of a pledge. This is exactly the moment when the principle of indivisibility works, that is, buildings cannot exist separately from the site, respectively, they are also included in the pledge.
Consider another case. For example, citizen X owns a land plot acquired with personal funds and without any encumbrances. Once he decided to build a residential building on this site with a mortgage. The bank issued money and from that moment took a plot as a pledge. And then, after building the house and registering the rights to it, he will take the house as a pledge. The same principle of indivisibility. Only in this case, the lender initially pledged land, since housing has not yet been built, and the loan must be secured with something.
Land foreclosure also occurs through open tendering. An important feature is the sale of agricultural land. As long as the harvest is not harvested and sold, foreclosure cannot be applied to these lands.
Mortgage on non-residential premises
Mortgage of non-residential premises has a number of features that are described in the relevant section of the law.
So, an enterprise as a single property complex is transferred to a mortgage with all the property located on the territory, including the land.
A separate non-residential premises is pledged in full, together with the land.
In this case, the pledge holder may in no way impede or limit the right of the pledgor to use the property. The only exceptions are transactions with the alienation of real estate and pledging it.
An enterprise may be pledged only if the amount of debt is at least half of the appraised value of the property. The deadline for submitting claims for the collection of collateral is at least one year from the date of conclusion of the contract.
Suppose enterprise N was transferred to a mortgage bank Y under a loan agreement for a period of 9 months. If the company does not repay the debt, the bank still can not begin the collection process earlier than 12 months from the date of signing the document.
By the way, to recover debt from a company on a mortgage is possible only by court order.
Mortgage of houses and apartments
When transferring them to a mortgage, special requirements are also imposed on residential buildings and apartments, since they can be the place of residence not only of the mortgagor.
Immediately it is worth noting that the mortgage of residential premises that are in municipal ownership is not allowed. For other objects there are a number of features:
- In case of alienation of property in which minor children are registered, permission of guardianship authorities is required.
- During the construction of a residential building, a mortgage can be provided with materials and equipment, but after construction, the finished house is pledged.
- According to article 77 of the law, a dwelling that is bought with credit money is pledged from the moment of registration of property rights.
- Under the Military Mortgage, housing is pledged by the lender and the government agency that makes payments to repay the loan.
By the way, the Federation Council recently adopted amendments to the law “On the accumulative-mortgage system”, according to which money is accrued for the “Military mortgage”. Now a greater number of categories of military personnel have the right to restore their account after re-entering the service.
The most important point in this section is the paragraph on foreclosure on housing. This fact is the basis for the eviction of residents. It is carried out in accordance with the requirements of the law. This moment is described in detail in Art. 78.
As you can see, this federal law gives a fairly clear idea of \u200b\u200bthe mortgage. This is an effective tool that regulates the mortgage market in Russia. What is important, this is a living document that, although not always lightning fast, responds to changes in the current situation and allows the development of housing construction in the country.
Whatever we think about the mortgage, it becomes only easier to get a mortgage every year. A considerable merit in this belongs precisely to mortgage legislation. You can find out more.
If you need qualified help from a mortgage lawyer, protection of your interests before the bank or the second half in case of a divorce, we recommend that you sign up for a free consultation with our lawyer. He will provide professional help and suggest an effective way out of your situation.
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The legal framework for mortgages is established by Federal Law 102 FZ “On Mortgage (Real Estate Mortgage)”. This is the main document fixing the rights of the parties to the transaction and describing its procedure. We will consider key aspects of the legislative act, innovations and points to which borrowers should pay special attention.
What is regulated by the law on mortgage (real estate pledge) as amended for 2020
Federal Law No. 102 defines the grounds for a mortgage, regulates the rights of interested parties and describes the procedure for registering a mortgage and drawing up an agreement on a mortgage. In accordance with Clause 1, Clause 1, the parties to the mortgage agreement are the pledge holder (creditor) and the pledgor (borrower), who, as collateral for obligations, transfers real estate to the creditor.
This legal act is one of the main documents for mortgage borrowers, since it is on its basis that banks determine the terms of the contract.
The law was adopted in 1998, but over the years has undergone many changes. In 2020, regular adjustments were made. What's new in the document:
- Parties to the transaction can issue a mortgage in electronic form on the portal of State Services or the website of Rosreestr. Such amendments will simplify the paperwork, reduce borrower material costs and ensure the safety of the document.
- Mortgage content requirements have changed. In addition to the basic information regarding the parties' data, the amount of obligations and the terms, the document should contain extended information about the debtor (SNILS and TIN) and real estate (cadastral number, property description, market value).
- The changes affected the content of the contract between the lender and the borrower. From 1.07.2018, the list of basic conditions is determined by Federal Law No. 353 “On Consumer Loans”. The list of mandatory clauses of the contract has expanded significantly, which reduces the risk of disputes between the parties.
- The amount of debt repayment and the amount of the penalty from 2020 will depend on the interest rate of the Central Bank.
- The latest amendment concerned the conditions of collection. In accordance with Art. 61 of the law as amended, the debt of the borrower will be considered closed if real estate prices have fallen so much that the bank has not been able to sell the security at public auction.
In the near future, a bill with changes is expected: optimization of mortgage registration through the introduction of digital technologies, the introduction of a ban on the issuance of mortgage loans in foreign currency, and the possibility of restructuring foreign currency mortgage loans.
Brief description of sections
Federal Law No. 102 consists of 14 chapters, each of which considers key aspects of a mortgage:
- The main provisions. The section defines the concept of a mortgage, the grounds for its occurrence and the list of real estate that can be pledged to secure debt obligations.
- Mortgage agreement. This chapter is devoted to the rules for concluding a mortgage agreement and registering a mortgage in Rosreestr.
- Mortgage. Here everything is about the content, execution, registration and exercise of mortgage rights.
- Registration of a mortgage. The section establishes the procedure for registering a mortgage, the conditions for changing the registration record for a pledge, the size of the state duty and the removal of encumbrances from real estate.
- Security of collateral. The chapter establishes the obligation of the pledgor to ensure the safety of real estate, including through its insurance. It also talks about the consequences of the loss and damage of collateral for the debtor.
- Rights to property of third parties. The conditions and procedure for the transfer of rights to mortgaged property to third parties are established.
- Subsequent mortgage. The section governs the issue of re-encumbrance of property: the conditions under which it is possible and the rules of registration.
- Assignment of rights under a mortgage agreement. This chapter states that the bank may sell the right to claim debt to third parties.
- Collection. The grounds for collecting the subject of the pledge, the judicial procedure and methods for resolving disputes are determined.
- Realization of mortgaged real estate. The chapter establishes the tendering procedure and the grounds for terminating the collection of property.
- Features of the mortgage of the land. The list of plots that may be pledged, the rights of the parties to the transaction on the facilities located on the pledged land, the specifics of collecting the plot depending on the category of land.
- Mortgage companies. The deadlines for fulfillment of obligations in case of a mortgage of enterprises, the rights of the borrower, as well as the rules for the collection of collateral are set.
- Mortgage of residential real estate. The section considers the rules for registration of apartments and houses as a pledge and determines the procedure for the sale of property in the event of foreclosure on it.
Advantages and disadvantages of the law
The bill is improved every year. Innovations are called, first of all, to protect the rights of the parties and simplify the process of processing the transaction.
The main advantages of the law:
- the interests of all owners of real estate, which is pledged, are taken into account;
- with a mortgage, by virtue of the law, one contract is drawn up, which avoids paperwork;
- the ability to pledge the same property at once to several creditors.
Despite constant adjustments, the law still has a lot of weaknesses. For example, it does not indicate cases where the encumbrance on the property can be removed in case of termination of the contract of sale. The grounds on which the validity of the pledge ends are listed in Art. 352 of the Civil Code of the Russian Federation, and it also does not contain a word about the termination of the encumbrance in case of termination of the contract of sale. If the borrower bought an apartment on credit money, but then terminated the contract with the seller, then the record of the mortgage in Rosreestr will remain valid until the buyer repays the loan.
Another significant minus is the lender’s right to assign the rights to claim debt. The Bank may sell the borrower's debt to third parties without a license to carry out mortgage lending. It turns out that any third-party organization can become a pledge holder.
It can also be noted that the document as a whole is more aimed at protecting the interests of the bank, its ability to collect debt and realize collateral.
Those who are going to apply for a mortgage, it is advisable to know the key aspects of the law:
- Real estate pledged to the bank will be encumbered until the loan is repaid. This means that the borrower does not have the right to make transactions with this object during the entire payment period without the consent of the lender. If housing was purchased on a military mortgage, then both the bank and the Ministry of Defense will act as pledgeholders.
- In case of non-repayment of the debt, the pledge is sold at the auction, and the money received is sent to the bank as compensation for unpaid interest, non-payment of the main debt and for reimbursement of costs in court.
- If several persons own the real estate, then their consent is required for registration of the pledge.
- If there are people with disabilities or children among homeowners, then the consent of the guardianship and trusteeship authorities is required to obtain a pledge. In accordance with Art. 77, authorities can give consent only if the transfer of housing as a pledge does not violate the interests of minors or legally incapable owners.
- The subject of the pledge is insured without fail. Credit risk insurance is not required.
- Registration of a mortgage is carried out at the location of the property.
- The bank may require early payment of the entire amount in case of violation by the borrower of the terms of the contract and Federal Law No. 102.
- The bank has the right to verify pledged property.
- Debt collection is unacceptable if the outstanding balance is less than 5% of the total loan amount.
- If the recipient of the loan cannot repay the debt and the matter has reached the court, then he has the right to demand a 1-year delay in the sale of the pledge.
- In accordance with Art. 78 in the recovery of housing and its sale, the borrower loses the right to use this property.
Thus, the mortgage law is the fundamental document on the basis of which the relationship between the bank and the borrower is built.
Federal mortgage law
A mortgage is a pledge of expensive large property with the provision of the right of possession to the lender who lent the money. The debtor signs a mortgage agreement for his property and makes a promise to the creditor to repay the debt with money or pledged property, if he cannot return it in cash. You can mortgage and buy housing, land, a yacht, a car and other property. Since the purchase of real estate by mortgage, it becomes the property of the borrower. A common mortgage option is buying an apartment on credit. Often, pledged housing is pledged, but it is possible to provide an apartment owned by you. Mortgages are issued by banks. Credit conditions are different for everyone. The Federal Law on Mortgages regulates the provisions for issuing and using mortgages in Russia.
Last Modified Mortgage Law: Innovations in 2019
In 2019, the President of the Russian Federation amended federal law 102 on mortgages. According to new data, the following items appeared:
- The opportunity arose to register car places as a mortgage. In this case, mandatory registration of mortgages is canceled. This function is implemented only if necessary.
- The registration rules, its terms and the possibility of suspension were canceled. Starting from this year, these issues are regulated by another law of the Federal level No. 218 of 2015.
In addition, under the new legislation on mortgages, several points have lost their own force. For example, paragraph 1 of article number 22, as well as paragraph 3 of article number 25. Also, the meaning of articles 27 and 28 was completely lost. They dealt with regulatory issues in the process of challenging the registration of a mortgage loan. The latest changes have been a legal decrease in the base interest on loans issued with state support. Starting January 1, 2019, their size is from 9 to 11.4%. For this, significant changes were made regarding the recovery of money from debtors. Now the amount of debt compensation directly depends on the interest rate of the Central Bank.
Also, changes in the law on mortgages in 2019 touched on a moratorium on early repayment of mortgage loans, but until now, this amendment has not been approved by the authorities. At the moment, they allow borrowers to pay for their official obligations earlier than the specified time period without presenting any penalties.
Also, mortgage debtors were mitigated by fines and penalties, which previously amounted to about 20% per year. Now this penalty will need to be paid depending on what the base rate from the Central Bank.
Features of the terms for processing the process specified in the new law
The Law on Mortgage Lending examines this process, depending on what type of real estate is bought, which is a guarantee. The differences in the procedure depend on these points. Residential real estate is given up to 5 days, non-residential fund, including the land area of \u200b\u200bthe building, commercial and industrial real estate, receives a period of up to 15 days. For other facilities, the period is up to 30 days. With notarization of the pledge agreement, the entire procedure can be reduced to 5 days, but no more.
Putin's order to reduce mortgage rates below 8%
The President of the Russian Federation has introduced instructions to bring mortgage rates to less than 8%. Such a decision should be put into effect until 2024, it is still considered as Putin’s new mortgage law.
This is what is discussed in the decree of the head of the country, entitled "National technical development tasks for a period up to 2024." This law was published on the official resource of the Kremlin.
The Government of the Russian Federation instructed by 2024 to provide affordable housing for many families whose wealth is average. That is why interest rates should not exceed 8% per year. It was also noted that over the past six months it is necessary to reach a level that allows at least 5 million Russian families to improve their own living conditions every year. Earlier, the head of Sberbank announced that his bank was already ready to reduce mortgage rates to 7% for 2 years, he will try to do it early. According to experts, the reduction in rates will occur to 6.2% by the end of this year.
Putin signed the mortgage law, but in order for it to take effect, the client must first take out insurance, and after transferring a personal insurance contract to a banking institution, he must sign a consent to home insurance. We also note that subsidies can be offered by the country only when the borrower has fully complied with all the requirements, and the clients on the issued loan make payments in clearly specified lines. This approach by the Russian Federation will be an incentive for citizens to increase the birth rate in the country.
Current edition mortgage law 2019: reason for developing the program
The Federal Law on Mortgage Lending was put into effect, since in 2018 it became clear that the work of construction companies and developers is carried out according to a well-coordinated scheme, while their own preferences are taken into account. It remains for the buyer to decide whether to purchase apartments or not, solely out of their own capabilities. As a result, a situation arose in the Russian Federation where developers are not able to sell multi-unit new buildings, and buyers cannot become their owners because of their high cost. This led to a losing situation for both parties, developers became bankrupt, banks did not return the money invested in the construction, and citizens did not have a place to live, because the interest rates of banks did not allow mortgage families who have small children. That is why a new mortgage law was passed in 2019. . According to the ruling branches of the state, such a decision will be:
- increase the birth rate in the country;
- to reduce the key interest rate of the Central Bank of the Russian Federation, which will make the mortgage offer as accessible as possible to the population;
- revive the real estate market, register completed projects, multi-apartment buildings, which are still under construction;
- to return to the banking institutions the material resources used to finance the projects;
- to help families in acquiring their own housing, this mainly concerns the economy class, such a decision will occur due to a reduction in the interest that must be paid to the bank;
- to return to banking companies a percentage difference in the form of subsidies that they may lose on loans granted to citizens of the Russian Federation.
In addition, the protection of citizens' deposits will be ensured when purchasing new housing under the DDU.
In order to realize all the goals set, the President, the Ministry of Finance and the Central Bank issue relevant decrees and are reviewing legislation. For the President of the Russian Federation, the regulation of the activities of banking systems has become a priority issue. Therefore, he dealt with the problem of reducing the key rate when applying for a mortgage. The mortgage law guarantees that in the coming year, mortgages, as well as other loan products will become more accessible to average citizens of the Russian Federation.
Mortgage “by virtue of law” or “by virtue of contract”
The Real Estate Mortgage Law provides for the conclusion of such mortgage agreements:
- “By virtue of the law” is the purchase, construction, sale on credit of real estate and rent. When buying a home, a person uses his money or borrowed money. A loan or loan agreement is drawn up for the borrowed amount. Mortgages are registered by force of law at the time of drawing up the sales contract. The property owner changes automatically. An additional statement by both parties is not necessary.
- “By virtue of an agreement” - a pledge agreement is drawn up with the application of both parties to the Registration Chamber. For home renovation, for starting a business, education or other event, people can mortgage their own property.
indicates that each case must be registered in the Unified State Register, otherwise the contract is considered invalid. In both cases, the property is assigned to the one whose name is recorded in the Certificate of ownership. The owner can use and live in a mortgage housing and must protect it. You can not sell or provide collateral for other loans, if it is not prescribed in the mortgage agreement. You can freely dispose of property after a full loan repayment.
If the debtor is not able to repay the loan, then the law on the mortgage of the real estate lender is "first placed in the queue" to receive money from the borrower. This gives him an advantage over other creditors (if any) who wish to receive money from the debtor. According to the law, a mortgaged apartment will be sold at public auction. The proceeds should cover the mortgage debt and losses of the lender (interest on the loan, costs of bidding, forfeit, costs of maintaining the apartment). It happens that the amount received is not enough to pay off all costs. In this case, the federal law on mortgages determines that the borrower will still fulfill obligations on the mortgage. The mortgaged property is sold, which means that the mortgage agreement has been implemented. The lender writes off the remaining debt and does not have the right to demand it from the borrower.
Mortgage under the new legislation 2019 differs in several parameters. Consider the main differences. According to the legal form of the mortgage, the subject of the pledge is the purchased apartment, the one that the borrower decided to purchase. The subject of a contractual mortgage can be any other type of real estate that the buyer has.
Registration of a mortgage loan is carried out in parallel with the registration rights to residential real estate, and contractual - after the purchase and sale document is executed. Registration of a legal mortgage does not provide for the collection of state fees, unlike the one that comes into force of the contract.
Thanks to the new legislation of the Russian Federation, a mortgage will become even more accessible for citizens of the country.
Mortgage Registration Procedure
From July 16, 1998, N102, the federal law on mortgages regulates the registration of mortgages. If the agreement became its basis, then in order to carry out state registration it is necessary to submit applications from two parties to the agreement. The borrower must provide a list of documents:
- signed mortgage agreement;
- documents accompanying the contract;
- state duty receipt.
The Real Estate Mortgage Act also defines the timing of registration. Legislation limits them to one month. In order to register a mortgage in the Unified Register, you need to make a certain entry in it, which attests to the borrower's right to receive property on the mortgage. A fixed date is considered the date of registration. Without this procedure, the transaction is considered incomplete and does not give the borrower rights to housing.
The mortgage agreement must contain:
- subject of a mortgage;
- assessed value;
- amount and term of loan repayment;
- the right (property, rent, etc.), on the basis of which the mortgage object is held by the borrower with an indication of the state body where his right to real estate was registered.
Mortgage Terms
The Federal Law on Mortgages determines that one property or several types of real estate may act as mortgage objects on the basis of the following conditions for issuing a mortgage loan:
- if the property is owned by the creditor or on the right of economic ownership;
- if the ownership of real estate is registered as a separate object;
- other real estate (incomplete construction real estate may also be used), which after the conclusion of the mortgage agreement will become the property of the mortgagor;
- real estate that is an object of state or communal enterprise on the basis of economic ownership;
- share of the property.
Real estate is pledged with all essential items. If the land plot is pledged, the mortgage covers the buildings located on it. The terms of the mortgage provide that the value of the collateral is determined by the consent of both parties with the help of an independent assessment of the expert of the mortgage.
The Law on Real Estate Mortgage stipulates the conditions for obtaining a mortgage loan:
- The annual interest rate.
- Loan amount. It can be 70 or 80% of the total cost of housing purchased. The remainder is considered as the down payment that the borrower makes when receiving a loan. The borrower will be able to increase the loan amount with the help of co-borrowers. This may be a husband or wife, relatives or other individuals. When calculating the amount of a mortgage loan, the bank will take into account their degree of kinship and the ratio of income. The co-borrower is governed by the mortgage agreement.
- Calculation of payments. The residual amount that the borrower gives to the creditor depends on it. He has the right to choose the currency of the loan himself.
- Proof of income of the borrower. The list of incomes and the form of confirmation varies between banks. Many require a certain length of service at one job.
- The presence of guarantors.
- Additional costs for obtaining a loan are mainly 10% of the amount of the down payment. For this, the borrower should be ready.
- Credit term.
How to get a mortgage at 6% under the new legislation
Federal law on mortgages stipulates that if mortgage payments are already underway, then you just need to provide a certificate of the birth of children. Then you need to make a petition for the year. In this case, the bank will restructure the payment that remains. If the mortgage is only planned, then it is necessary to collect a standard package of documents in order to get a loan. These include:
- a completed application for a mortgage;
- passport, as well as its scanned version;
- photocopy of work book;
- notification of income levels, compiled in the form 2NDFL;
- if SP - a copy of state. registration and tax return;
- scanned versions of the birth certificate of children;
- purchase agreement or document on participation in shared construction.
If disputes arise or banks want confirmation of this or that information, additional documents may be required. They are issued at the request of the manager of the financial organization.
Mortgage Refinancing After Birth
The current version of the Mortgage Law stipulates that if a loan was issued after 2018, and then for the period until 2022 inclusive, the family has a second or third child, they are given the opportunity to refinance the mortgage. Those who take part in the subsidy program, from the moment the second child is born, are also offered the effect of preferential mortgages, but when a third one is born.
What are the requirements for a loan
Putin's mortgage law in 2019 will be relevant for citizens whose loan agreements meet several parameters:
- loan processing takes place exclusively in rubles and not earlier than January 1, 2018;
- loan amount should not exceed 3,000,000 rubles. for the regions of the Russian Federation and does not exceed 8 million rubles. for Moscow and the region, as well as St. Petersburg;
- the down payment should be at least 20% of the total cost of the apartment;
- interest rate will be 6% at the time of subsidizing;
- a prerequisite is the existence of life insurance for the borrower and the object from the moment of completion of its construction.
Also take into account the fact that the repayment of a mortgage under 102 Federal Laws is carried out by annuity payments.
Changes in mortgage risk ratios starting in 2019
Many citizens of the Russian Federation dream of getting their own housing, but in most cases they don’t have enough financial resources to buy it, so they are forced to apply for a mortgage. Taking a mortgage loan, the acquired property is set as a security. The new mortgage law in 2019, as well as the previous one, states that if it is impossible to pay off your own mortgage loan debt, the client loses the acquired housing. This outcome is not beneficial either to banks or to borrowers. But by providing a mortgage, banks still want to assess their possible financial risks. For this, a certain analysis and reports are carried out. In addition, you will need to assess the financial condition of the client who wants to apply for a loan, as well as analyze certain conditions that guarantee a financial institution under insurance and stability.
Recently, amendments have been made to the legislation on mortgages regarding the risk factor for a mortgage loan with a small down payment. Starting January 1, 2019, it rises from 150 to 200%. This decision has been updated to ensure financial stability. This change applies to loans that will be issued from January 1 of the current year. Also, the central bank announced that this segment of lending acts as the most risky. Therefore, an increase in the coefficient is a well-grounded decision, given that these loans have recently begun to grow in quantitative terms.
Of course, banking companies assess the solvency of their own borrowers before they provide a loan. At the same time, the client’s income level for a month, the availability of guarantors, the composition of the family, and so on are necessarily considered. In any case, in order to obtain a mortgage, a financial institution will require the provision of many facts that will document the level of its income.
Of course, many families require the opportunity to take advantage of mortgage lending in order to receive state support in this matter. Based on the characteristics of the modern market, it is unrealistic to collect immediately the necessary amount of financial resources for the purchase of housing. Therefore, the latest edition of the Federal Law 102 on mortgages will make this type of loan an even more popular option among the rest.
In the Russian Federation, VTB 24 and Sberbank are very active in mortgage lending. There are also many financial organizations that work directly with mortgages, such as the Housing Finance Bank. Also, UniCredit, Alpha can provide advantageous offers. The Law on Mortgage 102 FZ stipulates that the client should choose the decision on cooperation directly after studying all the proposals.
Proposal of banks in the latest edition of the Federal Law on Mortgages
Mortgage facility security
From July 16, 1998, N102, the federal law on mortgages obliges the borrower to maintain the property in proper form with his own funds. If necessary, he should carry out current repairs at his own expense and repair minor damage. The borrower must notify the lender if the condition of the mortgage property worsens or is lost. When registering a mortgage, the lender has the right to documentarily and naturally check the condition of the mortgage object. The law gives him this right for the duration of the mortgage agreement.
Underwater rocks
Real Estate Mortgage Actassumes that the apartment may be pledged by a third party who is not in the loan agreement. If he does not, the person for whom the money was taken on credit will receive the ownership of this housing, with the transfer of mortgage obligations to him by virtue of the contract. It is impossible to sell this apartment without the consent of the lending bank. If the husband or wife bought the property while married, in the event of a divorce, the federal law on mortgages grants the right to spouses to share the collateral apartment, even if they have not paid the debt. No matter who the apartment is for, the second may require 50% of the housing, even if he is not going to pay the bank a loan in the future. To prevent this situation, the couple conclude a marriage contract at the stage of registration of the mortgage. It indicates the sole owner of the property for which a loan is issued.
The advantages and disadvantages of mortgages
The main advantage of a mortgage is that instead of saving the necessary amount for buying a house for many years, the federal law on mortgages allows you to move into a new apartment or house now. In this case, mortgage housing becomes the property of the borrower. In the new apartment, you can register the family members of the borrower. For security purposes, the risks of loss of ownership of the apartment and its damage, as well as the borrower’s disability, are insured. In addition, the mortgage still has a number of "advantages":
- The borrower is given a property tax deduction. He lowers the interest rate due to the fact that he does not need to pay income tax on the amount spent on the purchase of an apartment and on interest.
- A long loan term makes monthly payments small, which means they do not burden too much.
- For specific categories of people, it may come as a surprise that social mortgages exist in their region.
The lack of mortgages in the "overpayment" for the apartment. It can reach 100%. Mortgage “overpayment” includes annual expenses for compulsory insurance and interest on the loan. Another disadvantage is the many requirements of banks for borrowers: registration, Russian citizenship, proof of income, work experience in one place, guarantors, etc.
To solve the housing problem with a mortgage, it is important to find a compromise between the positive and negative sides of the mortgage and choose a worthy partner (bank).
(real estate pledge)
last revised on 10/05/2015
Chapter I. General Provisions
Article 1. Grounds for the emergence of a mortgage and its regulation
Section 2. Mortgage Obligation
Article 3. Requirements secured by a mortgage
Article 4. Securing a mortgage of additional expenses of the pledge holder
Article 5. Property that may be the subject of a mortgage
Article 6. The right to pledge property under a mortgage agreement
Article 7. Mortgage of property in common ownership
Chapter II Conclusion of a mortgage agreement
Article 8. General rules for concluding a mortgage agreement
Article 9. Content of the mortgage agreement
Article 9.1. Features of the terms of the loan agreement, loan agreement that are concluded with an individual for purposes not related to his entrepreneurial activity, and the obligations of the borrower for which are secured by a mortgage
Article 10. State registration of a mortgage agreement
Article 11. The emergence of a mortgage as an encumbrance
Article 12. Warning to the mortgagee about the rights of third parties on the subject of a mortgage
Chapter III. Mortgage
Section 13. Basic Provisions on Mortgages
Section 14. Mortgage Content
Section 15. Mortgage Applications
Section 16. Registration of Mortgage Owners
Section 17. Exercise of mortgage rights and fulfillment of a mortgage obligation
Article 18. Restoration of rights to a lost mortgage
Chapter IV. State registration of mortgages
Article 19. Basic Provisions on State Registration of Mortgages
Article 20. The procedure for state registration of mortgages
Article 21. Denial of state registration of a mortgage and suspension of state registration of a mortgage
Article 22. Registration record on a mortgage and certificate of state registration of a mortgage
Article 23. Correction, amendment and addition of a mortgage registration record
Section 24. State Duty
Section 25. Redemption of a mortgage registration record
Section 25.1. Redemption of a mortgage registration record in case of liquidation of a pledge holder, being a legal entity
Article 26. Public nature of state registration of mortgages
Section 27. Appeal against actions related to state registration of a mortgage
Section 28. Responsibility of the mortgage registration authority
Chapter V. Security of property mortgaged under a mortgage agreement
Section 29. Use by the Pledgor of Pledged Property
Section 30. Maintenance and Repair of Pledged Property
Article 31. Mortgaged property insurance. Borrower liability insurance and lender financial risk insurance
Article 32. Measures to protect mortgaged property from loss and damage
Article 33. Protection of mortgaged property from claims of third parties
Article 34. The right of the pledge holder to verify the pledged property
Article 35. Rights of the pledge holder in case of inadequate safeguarding of the pledged property
Section 36. Consequences of Loss or Damage of Pledged Property
Chapter VI. Transfer of rights to property pledged under a mortgage agreement to other persons and encumbrance of this property with the rights of other persons
Section 37. Alienation of Pledged Property
Article 38. Preservation of a mortgage upon transfer of rights to mortgaged property to another person
Article 39. Consequences of violation of the rules on the alienation of pledged property
Article 40. Encumbrance of pledged property with the rights of other persons
Section 41. Consequences of Forced Seizure of Pledged Property by the State
Section 42. Consequences of Vindication of Pledged Property
Chapter VII. Subsequent mortgage
Article 43. The concept of subsequent mortgages and the conditions under which it is allowed
Article 44. Warning to pledge holders of previous and subsequent mortgages. Amendment to a previous mortgage agreement
Article 45. State registration of subsequent mortgages
Article 46. Satisfaction of claims of mortgagees on previous and subsequent mortgages
Chapter VIII. Assignment of rights under a mortgage agreement. Mortgage transfer and pledge
Article 47. Assignment of rights under a mortgage agreement or obligation secured by a mortgage
Section 48. Transfer of Mortgage Rights
Section 49. Mortgage Pledge
Chapter IX. Foreclosure on property pledged under a mortgage agreement
Article 50. Grounds for foreclosing on pledged property
Section 51. Judicial Procedure for the Recovery of Pledged Property
Article 52. Jurisdiction and jurisdiction of cases on foreclosure on mortgaged property
Article 53. Measures to protect the interests of other mortgagees, absent mortgagor and other persons
Article 54. Issues resolved by the court in the consideration of a case on foreclosure on pledged property
Article 54.1. Grounds for refusal of foreclosure on pledged property
Article 55. Foreclosure on pledged property out of court
Article 55.1. Settlement agreement on the obligation secured by a mortgage, when foreclosing on the subject of a mortgage
Article 55.2. Notification Procedure and Requirements
Chapter X. The foreclosure of foreclosed property
Section 56. Sale of Pledged Property
Section 57. Procedure for conducting public bidding during enforcement proceedings
Article 58. Declaring a public auction invalid
Article 59. Sale of pledged property by agreement of the parties
Article 59.1. Retention of pledged property
Article 60. Termination of foreclosure on mortgaged property and its sale
Article 61. Distribution of the amount of proceeds from the sale of pledged property
Chapter xi. Features mortgages of land
Article 62. Land plots that may be subject to a mortgage
Section 62.1. Mortgage of land owned by the municipality, and land, state ownership of which is not delimited
Article 63. Land plots not subject to mortgage
Article 64. Mortgage of a land plot on which there are buildings or structures belonging to the mortgagor
Article 64.1. Mortgage of a land plot acquired using credit funds of a bank or other credit institution or funds of a special-purpose loan
Article 64.2. Mortgage of the land plot on which the buildings or structures are located, acquired or constructed using credit funds of a bank or other credit institution or funds of a special-purpose loan
Article 65. Construction by a pledgor of buildings or structures on a pledged land plot
Article 66. Mortgage of a land plot on which there are buildings or structures owned by third parties
Article 67. Assessment of a land plot with its mortgage
Article 68. Features of foreclosure on pledged land plots and their sale
Chapter XII. Features of the mortgage company, building, construction and non-residential premises
Article 69. Mortgage of enterprises, buildings or structures with the land on which they are located
Article 69.1. Mortgage of buildings, structures and non-residential premises purchased using credit funds of a bank or other credit institution or funds of a special-purpose loan
Article 70. Mortgage of an enterprise as a property complex
Article 71. Obligations that may be secured by an enterprise mortgage
Article 72. Rights of the mortgagor in relation to the pledged enterprise
Article 73. Foreclosure on a pledged enterprise
Chapter XIII. Features mortgages of houses and apartments
Section 74. Application of mortgage rules for residential buildings and apartments
Article 75. Mortgage of apartments in an apartment building
Article 76. Mortgage of residential buildings under construction
Article 77. Mortgage of residential buildings and apartments purchased at the expense of a loan of a bank or other credit organization
Section 77.1. Mortgage of a hired house
Article 78. Foreclosure on mortgaged apartment house or apartment
Chapter XIV. Final provisions
Article 79. Enactment of this Federal Law