Mortgage to be governed by new law

The relations between the participants in the mortgage market will be governed by a new law, adopted in first reading by the Parliament today. Economy and Trade Minister has stated at the plenary sitting that the law aims to remove contradictory provisions concerning mortgage and to offer increased protection to the subjects of mortgage agreements. The parliamentarians, in general, saluted the bill, but remarked that certain provisions restricted the benefits of the law to a limited number of people, Info-Prim Neo reports. One of the most discussed chapters of the bill was the one providing for the obligation to secure the object of the mortgage to the benefit of the creditor. The law lays this obligation with the mortgagor (the person who borrows money under a mortgage agreement from the mortgagee). If the mortgagor fails to secure the property, the creditor shall do that at the expense of the debtor. We admit that this provision will generate additional costs at the first stage, but what we need now is to reduce risks on the mortgage market, said Dodon. A number of opposition lawmakers insisted, however, on the necessity of erasing the provision in question upon the second reading. MP Ion Gutu of the Moldova Noastra Alliance believes that the bill, as it is currently drafted, will advantage the banks, which are customary mortgagees, and does not guarantee the interests of ordinary people. Making it mandatory to secure the object of the mortgage will restrict the benefits of this system to some 15 percent of the population, Gutu argued. Speaking of the novelties introduced by the bill, Minister Dodon has said the new law covers all types of real estate, no matter its purpose. The law also stipulates the form and content of the mortgage agreement, as well as the obligation to establish the value of the mortgaged property by an assessor. Depending on operators, the mortgage market will be supervised by the National Bank when banks act as mortgagees, and the National Commission for the Financial Market in the case of other players on the market.