Vice Premier Dodon: Mortgage Law to lead to more mortgage loans

Enforcing the Mortgage Law is going to ease the growth of the mortgage share, says deputy Prime-Minister Igor Dodon, the Economy and Trade Minister. He is quoted by Info-Prim Neo as saying the new law will allow to restructure the market, as only the companies matching the European standards will survive. Igor Dodon said Friday at a conference on mortgage, the new law made possible getting long-term loans at much smaller interest rates from international banks. In this context, only companies offering good buildings but also low-interest and long-term mortgages will remain on the constructions market in the future. “The real estate is a pre-mature tool for the Moldovan mortgage market, that is why we'll go with the mortgages first,” the official said. An official with the Justice Ministry, Vasile Vulpe, says the Mortgage Law will ease the access to loans, as it guarantees the increase of the mortgage obligation. “The Law treats and protects debtors and creditors alike, establishing a balance between their interests. The creditors are simpler rules to set up a mortgage and of executing their right to mortgage. There are prerequisites to execute risks, what implies trust in the purchasing power of the debtor and allows to decrease the interest rates, and also long-term payment,” Vasile Vulpe explained. On the other hand, the chief of the Moldovan office of the EBRD, Libor Krkoska, his bank shows willingness to contribute to the development of the mortgage market in Moldova. Next week, the EBRD will sign an arrangement with the Moldovan authorities, worth $15 million, to finance local farmers, as 70 million euros will be offered as loans to banks, and 700,000 euros – for technical assistance, the official said. According to a deputy Governor of the National Bank (BNM), Victor Cibotaru, some 2.6% of the bank loans granted up to now are destined to building apartments, 14.1% – were given for new buildings. Some 43.5% were channeled toward the real sector and to population, being supported by real estate pawns. The Mortgage Law is in force since Sept. 2 and establishes the fundamental principles regulating the primary mortgage market.