Sunday, May 31, 2009

Bankers want BNR to cover whole guarantee for ''First Home''

The banks asked BNR to accept the whole guarantee issued by the National Credit Guarantee Fund for SMEs in the "First Home" programme in constituting the provisions relating to the granted loans and will agree to an execution period of the Fund of up to 90 days. "We are discussing over extending the value taken into account from the guarantee of the Guarantee Fund for SMEs from the current 50% to 100%, so that the banks will no longer be obliged to make provisions for loans of up to 60,000 euro. If they do not make provisions, they will probably accept a period of execution of 90 days from the occurrence of the delay on the respective loan," said sources participating in discussions, Mediafax informs.

"The banks will execute the guarantee of the National Credit Guarantee Fund for SMEs, in the First Home programme, most likely in the case of arrears exceeding 90 days'', Sorin Mititelu, Executive Manager of the Business & Retail Product Development Department of BCR, said on Friday. In the opinion of the BCR representative, in the "First Home" programme, the customers will decide to what bank they will apply to get a loan and there will be no pre-qualification conditions for the banks from the government. He confirmed the central bank would accept the increase of the value taken into account in constituting provisions, from 50% to 100%, from the guarantee of the National Credit Guarantee Fund for SMEs.

"Studies show that approximately 3% of the active urban population express their intention to buy a home. There certainly is a potential demand, but the eligible demand has decreased even more lately. The programme comes in support of the eligible demand," said Mititelu. He considers the maximum amount guaranteed, of 60,000 euros, covers the need, as long as last year, at national level, an average mortgage loan amounted to approximately 50,000 euros. Only in the area of the Capital the average mortgage loans exceeded 60,000 euros.

The BCR manager also said the bank currently has a maximum indebtness level for mortgage loans of 60% of customer revenues.

The discussions also analysed the possibility of a counter-guarantee from the Finance Ministry, to increase trust in the capacity of the National Credit Guarantee for SMEs (FNGCIMM) to cover the guarantees executed. Given that banks will practically have zero provisions on the "First Home" mortgage loans of up to 60,000 euros, they will not have significant costs for delays in payment and will even be interested in suporting the client in resuming to pay installments in time.