Consultant Deloitte & Touche along with the representatives of the National Securities Commission (CNVM), of the Stock Exchange and the Finance Ministry has started work on the draft to regulate the secondary mortgage deed market.
This action is financed by the USAID and was taken in view of the boom expected to occur on the housing loan market over the next few years, as it might grow from $150-$200 million in 2002 to several billion dollars in 2007.
Such legislation is expected by both the financial institutions that will grant housing loans (banks, mortgage funds) and will want to refinance by selling the mortgage deeds, and by the capital market that might significantly grow once the mortgage deeds start trading. The draft will be complex, as besides issuing a special law, it requires modifying the current laws, devising a process to standardise the primary mortgage loan market and establishing new institutions (such as credit bureaux).
“The legislative development requires certain corrections of the mortgage loan and capital market legislation and legalisation of the companies set up to structure certain types of projects,” Dan Badea, partner with Badea, Radu and Asociatii law firm, the legal advisor for this draft, told Ziarul Financiar.
Badea says the team now working on the draft is also preparing the prerequisites for the standardisation of the procedures on which the primary market is built. The European Bank for Reconstruction and Development (EBRD), and the International Finance Corporation (IFC), World Bank’s investment arm are also involved in this process.
“We’re trying, together with all the major banks on the market and with EBRD and IFC, to create a set of credit documentation, security contracts and back office procedures, which are comparable on the market and compliant with the international standards. A credit bureau to be able to collect and provide information about the solvency of the potential mortgage market clients is also necessary,” Dan Badea says.
laurentiu.ispir@zf.ro