Solutions to restructure a mortgage loan

Temporary suspension of payments on the principal, charging a zero interest rate for a limited period, capitalising overdue amounts, cutting interest rates and/or extending the duration of the contract are among the main solutions for restructuring a mortgage loan, as included in a guide approved by the NBR (National Bank of Romania). According to recommendations of the guide put together by the Romanian Banking Association (ARB), when restructuring a loan, the client’s indebtedness level must not exceed 35%, and the repayment schedule must be “achievable and reasonable”. Bankers see loan restructuring as a “concession” to the client, and not as the client’s “right”.

Rule no. 1 would be that any client who starts having difficulties repaying loans should go to the bank as soon as possible to discuss solutions to relieve their payment effort. The main purpose: prevent the accumulation of interest rates and of penalties that would ultimately lead to the client defaulting on their payment and to foreclosure on his home, which is then auctioned.