Government to examine Concept of Mortgage Reforming. IPN economic analysis

The Concept of reforming the legal framework in the field of mortgage financing in Moldova will be finalized in the near future By the Ministry of Economy and Commerce (MEC) and submitted for Government approval. According to the deputy minister of economy, Igor Dodon, the reform of the legal framework in this field is justified by the necessity to modify several legal documents in the context of adopting in the near future the Mortgage Law. As he says this is why modifications of several legal documents will be promoted in the Parliament, especially the Guarantee Law, the Tax Code, in the case when the stimulation of banking institutions participation in the process of mortgage crediting will be desired. Cristina Martin, independent expert offering assistance to MEC in the process of elaborating this concept, says that the foreign experts in mortgage field, who visited recently the Republic of Moldova, concluded the challenges in the field of developing the mortgage sector and formulated recommendations regarding its juridical reformation. They concluded that a special mortgage law doesn’t exist. Cristina Martin says that MEC already proposed a series of actions with reforming character that are under the examination of the Parliament and that have as a goal the stimulation of mortgage reforming process in Moldova. Martin draws attention towards the fact that the citizens should not believe that once the Mortgage Law appears then the problems on the mortgage market will be solved or that it will be easier to contract mortgage credits. In order for this to happen, she says, the Government needs to undertake several economic and social measures. According to her, the law is necessary for a complex approach towards this field, presently it being regulated only partially and often in contradiction with several legal and normative documents. The Mortgage Law will have the statue of special law and will regulate in a detailed manner the procedures and aspects related to mortgage operations. Through unique and unvocal regulations the law will stimulate fair competition on the market, will eliminate present situations, when for example one commercial bank signs a selling-buying contract together with the mortgage contract – and another one thinks that this action is illegal. The law will answer several questions of the mortgage operators, will define the concept of mortgage, of mortgage credit, will determine who can be a mortgagee and who can contract mortgage credits, will regulate specific aspects related to the mortgagee right, of transmitting and selling a mortgage good. Also, the law will set “harsh” principles of consumer rights protection, this being one of the recommendations of the experts. They include clear regulations regarding mortgagee’s rights protection in the field of incomes, commissions and all expenses that appear during the contract period, the quoted source mentioned. Cristina Martin added that international experts recommend that other companies, like leasing, insurance, instate retirement founds or investment ones to be mortgage creditors besides financial institutions.