Tuesday, September 9, 2014

Experts warn of reverse mortgage in … – GazetaPrawna.pl

Experts warn of reverse mortgage in … – GazetaPrawna.pl

The Director of the Polish Bank Association (ZBP) Norbert Jeziorowicz told PAP that the PBA is not opposed to this solution. “This is an option for the bank and the customer,” – he stressed.

Some banks, though – as he said – certainly a minority, may be interested in providing the reverse mortgage in a foreign currency. “But everything will depend on the market situation” – pointed.

“Keep in mind that many Poles living abroad is the real estate in our country. Perhaps they are happy to benefit from such a product. Question of how banks will approach the issue of exchange rate risk “- he added.

In turn, according to the chief economist of Credit Agricole Jakub Borowski possibility of inverted mortgage borrowing in foreign currencies can be dangerous, especially for seniors and people with low incomes. “In particular, such persons should avoid exchange rate risk” – told PAP.

Also, the Postal Bank chief economist Monika Jacket considers this solution as controversial. The more that from 1 July this year. Financial Supervision Commission banned banks mortgage lending in foreign currencies. “I do not understand why such a provision would operate” – she noted.

In July this year, came into effect last of the recommendations in the Recommendation S. Banks can not give foreign currency loans to people who earn in dollars. In contrast, in our currency loan will not get a person or family who receive most of the income for example. In euros or dollars.

“Payment of the loan in foreign currency is risky. Installment size will depend on the zloty exchange rate” – she added.

Members of the parliamentary finance committee reported furthermore supported the Polish Bank Association (ZBP) amendment to the draft. As proposed by the PBA heir shall have the right within 12 months of the death of the borrower to repay the loan and keep the property or waive the right to her and settle with the bank with surplus.

Such a loan secured by a mortgage on the property, will be able to provide banks, branches of foreign banks, branches of credit institutions and credit institutions operating across borders. They are subject to the Financial Supervision Commission and the supervisory authorities of the Member stem. This is to ensure the safety of borrowers, mostly elderly people.

According to the project the bank will pay his client for a specified period of time or a one-off cash benefit, secured by mortgage on the house or apartment or the right to property. Although credit has to be offered to the elderly, for example. Retired, it does not impose a draft age limit.

The Bank may enter into an agreement reverse mortgage with a person who has, among others, ownership of real property, perpetual usufruct or cooperative ownership of the property. For securing the repayment of the bank is to be a mortgage on real property or a particular right to it.

Draft There is no obligation for banks to offer such a service, and only provides for such a possibility.

Bank granting such loans will have to provide customers with information sheets about the reverse mortgage offer at least seven days prior to the conclusion of the contract. This is to be an additional safeguard for customers to be able to consider whether the agreement suits them. Information to be provided before signing the agreement will not constitute a binding offer and will only be a simulation, in particular in terms of the amount of the reverse mortgage. The exact amount of the loan may be determined only after assessing the value of the premises by the valuer.

If, after conclusion of the contract with the bank, however, the client decides that he wants to withdraw from the contract, will be able to do it within 30 days without any consequences.

In case of death of the borrower, his heirs will be able to pay off the debt, otherwise you will be required to transfer ownership of the property to the bank. Heirs who choose not to pay, will participate in the settlement agreement. The Bank will have to pay the amount by which the value of the property exceeds the amount due under the contract the reverse mortgage. (PAP)

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