Assistance program for mortgage borrowers in 2020 - mortgage restructuring with state help

The fall in oil prices and Western and US sanctions led to a slowdown in economic growth. This had a negative impact on the solvency of the population. But the most affected were borrowers who took out long-term loans to purchase housing, especially in foreign currency. Against the backdrop of declining income levels and rising exchange rates of major currencies, many citizens are unable to fulfill their obligations to banks. Mortgage restructuring in 2020 with the help of the state is one of the effective ways to reduce the credit burden for those segments of the population who need it most.

What is debt restructuring

A home loan is a long-term commitment with an average maturity of 15-20 years and a maximum of 30 years. It is quite logical that not all borrowers will be able to maintain a high level of solvency during this period. Sometimes, due to various circumstances, income levels may fall. In such cases, the debtor should not wait until the situation completely worsens - it is necessary to immediately contact the bank with a request for restructuring.

So, let's take a closer look at what mortgage debt restructuring is and what kind of government assistance borrowers can count on.

The concept of “restructuring” in banking practice means changing the terms of a loan agreement in order to facilitate loan servicing.

Most often, banks extend the mortgage agreement, which reduces the amount of monthly payments (more on this below).

In addition to the lender, the borrower can count on government assistance in paying off the mortgage. This is clearly stated in the Decree of the Government of the Russian Federation No. 373 of April 20, 2015 “On the main conditions for the implementation of the program of assistance to certain categories of borrowers for mortgage loans.” In accordance with this regulatory document, certain categories of individuals can count on repaying their mortgage at the expense of the state. The government allocated 4.5 billion rubles for the implementation of this program, and this amount can be increased at the expense of income received by AHML.

It should be noted that the funds are received not by the borrower, but by the lender from AHML and thus reduce the amount of losses that he incurred by concluding an unfavorable restructuring agreement.

Refinancing can be issued in two ways:

• by making changes to the current loan agreement;
• by concluding a new agreement, under which the client receives a targeted loan to pay off the old debt.

AHML: assistance programs for mortgage borrowers in 2020. State-assisted restructuring

Due to the crisis in the economy and the decline in real incomes of the population, fulfilling obligations on mortgage loans has become an unbearable burden for many families.

The state has developed and adopted for implementation assistance programs for such borrowers, aimed at reducing problem debt and providing effective financial support to certain categories of citizens.

Read more about the legal basis of such programs, application experience and restrictions.

Government Resolution 373 on support for mortgage borrowers

In the spring of 2020, a meeting of the Government Commission on Economic Development and Integration was held, the purpose of which was to determine a plan of action and measures to ensure sustainable economic development and social stability of society.

As a result of consideration of many global and local issues, the Ministry of Construction of the Russian Federation prepared a Decree of the Government of the Russian Federation dated April 20, 2015.

or an “anti-crisis plan”, according to which borrowers with a difficult financial situation and an existing mortgage loan will be able to receive assistance from the state.

This regulatory act provides certain categories of the population with the right to debt restructuring.

The support mechanism used has the following characteristics:

• the duration of the period of assistance to borrowers ranges from 6 months to a year;
• the lender (bank) has the right to compensation for lost profits or losses from borrowers with a difficult financial situation;
• the maximum amount of such compensation cannot exceed 200 thousand rubles.

The program is implemented and financed by the Housing Mortgage Lending Agency. The adopted legislative act contributed to an increase in the authorized capital of AHML to 4.5 billion rubles, which will certainly play only a positive role in the process of providing assistance to problem mortgage holders.

At the moment, support is provided through the restructuring of a mortgage loan, which is carried out through the conclusion between the parties (bank and borrower) of an additional agreement to change the terms of the concluded agreement or through the conclusion of a new agreement in order to fully repay the existing debt.

Criteria for borrowers needing mortgage assistance

To receive financial support for a mortgage from the state, the borrower must meet all of the following criteria:

Attribution to categories of population that are subject to the terms of this Program:

• persons with minor children (including guardians);
• citizens who are disabled or have disabled children;
• combatants;
• persons with dependents under 24 years of age (students, students, graduate students, trainees, interns, etc.).

The conditions for getting into the program are as follows:

1. A drop in current income levels of at least 30% (for any mortgage loans).
2. The total average monthly income of the borrower and his family members for at least the last 3 months, taking into account the obligatory mortgage payment, does not exceed two times the subsistence level for each (indicators of a specific subject of the Russian Federation are taken for calculation).
3. An increase in monthly payments under a loan agreement by at least 30% for a foreign currency mortgage.
4. Applying for a mortgage loan no later than one year before the date of filing an application for state support and assistance.
5. Participation of the creditor bank in the ongoing Program.
6. Contact the bank with the required set of documents and application.

The amount of debt (including overdue) and the number of participations in loan restructuring do not matter. Interaction between the client and AHML is carried out through the selected agent bank, to which the borrower applies with the appropriate application.

In fact, the program described in Government Resolution No. 961 of August 11, 2020 narrowed its effect to the category of foreign currency borrowers and borrowers with a floating interest rate, since for ruble borrowers an increase in the monthly mortgage payment by 30% in the context of a falling market rate is rather nonsense .

Requirements for the subject of mortgage

The requirements established by law apply to the collateral (subject of mortgage) encumbered by the bank under a mortgage agreement. Among them:

• housing must have the status of the only one for the borrower and his family (the situation is considered equivalent when members of the borrower’s family and he himself have an aggregate share in the ownership of another property, but not more than 50% in each residential property);
• the residential property must be located on the territory of Russia and be the subject of collateral under a mortgage agreement;
• the program applies to any housing, including objects in relation to which the right of claim under an equity participation agreement applies;
• restrictions have been established on the maximum values ​​of the total area of ​​mortgage housing: no more than 45 square meters. m for one-room apartments, no more than 65 sq. m. m. for a house or two-room apartment and up to 85 sq. m. m. if there are three or more rooms;
• price 1 sq. m of collateral housing cannot exceed the price of 1 sq. m. m of a typical apartment/house on the primary or secondary real estate market by more than 60% (for calculation purposes, information is taken from Rosstat of the Russian Federation and current data on the regional market);
• the above restrictions do not apply to families with three or more children.

If an apartment or other piece of real estate transferred to the bank as collateral meets the listed requirements and restrictions, then the mortgagor has the full right to participate in the state program.

Be careful in submitting documents to AHML and at the same time for restructuring to your bank, since such incidents happen that the bank refuses restructuring on formal grounds. First of all, this concerns Sberbank of Russia.

Help for mortgage borrowers. News of the resumption of the AHML program

From the moment the mortgage borrower assistance program was adopted until March 2020, about 20 thousand Russian families received support. In the spring of this year, information appeared on the official website of AHML about the suspension of the program and the cessation of accepting new applications.

However, on August 11, 2020, the Government of the Russian Federation signed a new decree on resuming the procedure for providing support to borrowers with an existing mortgage who find themselves in a difficult life situation, starting on August 22.

For these purposes, 2 billion rubles were allocated from the reserve fund.

The amount of assistance will be 30% of the amount of the remaining debt on the loan, but not more than 1.5 million rubles.

The categories of the population designated in the Decree of the Government of the Russian Federation will be able to count on support from the state, however, special cases are considered with the participation of executive authorities, State Duma deputies and the Commissioner for Human Rights.

In particular, such cases may involve an increase in the volume of allocated funds (but no more than 2 times the established limit) or a change in other terms of the contract.

How to ask for help from AHML on a mortgage

The procedure for obtaining financial assistance for needy and problem borrowers consists of the following steps:

Submitting an application to the bank.

The borrower must contact his bank, with which the loan agreement and mortgage agreement were concluded, with a corresponding statement about the need to restructure the debt. If the bank has lost its license from the Central Bank of the Russian Federation, then it is necessary to interact with the receiving bank. An agreed and pre-assembled package of documents is attached to the application.

Currently, the country's leading banks are accepting applications, including Sberbank, VTB 24, Gazprombank, Rosselkhozbank, Promsvyazbank, Svyaz-Bank, Absolut Bank and others.

Advice!

Loan terms that suit both parties are discussed and agreed upon with bank employees.

Consideration of the application and making a final decision.

After providing a complete set of documents, the bank reviews the borrower’s application, checking the relevance of all information and compliance with all conditions and restrictions under the Program.

After this, the Credit Committee makes a decision, which is announced to the client.

In the process of making such a decision, the Bank closely cooperates with AHML on issues of legality of grounds and compliance with established requirements.

It is within the competence of banks to establish minimum and maximum terms for considering applications and making a final decision.

Concluding a new loan agreement with amended terms or additional terms. agreements to the old one.

Depending on which version of state support was accepted by the bank and AHML, changes to the signed documents will be accepted. Practice shows that most decisions contribute to the conclusion of a new loan agreement (refinancing).

The financial assistance program for mortgage borrowers will not completely relieve them from paying the principal debt and accrued interest, fines or penalties. Specific measures will be determined individually for each citizen.

Support forms and list of documents for restructuring

The adopted program involves the use of the following forms of state support:

• Reducing the amount of regular loan payments during the entire period of state assistance to one year.
• Partial or complete forgiveness of the principal debt or a change in lending conditions by the bank that issued the loan.
• Reduction of the current interest rate to no more than 11.5% per annum.
• Change of currency from foreign to Russian rubles (the exchange rate as of the date of conclusion of the restructuring agreement is taken into account).
• Exemption from payment by the borrower of penalties, penalties or other fines accrued in accordance with the terms of the loan agreement (except for penalties by court decision).

Filing an application for restructuring is accompanied by the collection of the following set of mandatory documents:

• an application in the established form for receiving state support indicating the reasons and necessary conditions for lending;
• passport of a citizen of the Russian Federation - borrower, mortgagor and family members (copies of all pages);
• a certificate of the client’s income for at least the last 3 months (in form 2-NDFL);
• a copy of the work record book or employment contract, certified by the employer;
• title document of the mortgage (copy);
• a document confirming the assignment of a certain social status to the borrower (birth certificates of children, certificate of disability, certificate of a combat veteran, etc.);
• application of a citizen and his family members about the right to housing that is not the subject of a pledge.

Documentary confirmation of the uniqueness of housing is not required, since AHML receives the necessary information independently from open sources and databases.

At the same time, each bank and AHML as a whole reserves the legal right to request additional documents, with the help of which it will be possible to make the right decision on the advisability of loan restructuring.

Practice and reviews from borrowers indicate the fact that almost only foreign currency mortgage holders can count on receiving financial assistance from the state. For other applications, the refusal rate is very high.

Attention!

This makes it possible to judge the impossibility of issuing a restructuring program for persons who fall under the other criteria of the Program, except for the presence of a mortgage in foreign currency. People who really find themselves in a difficult life situation and cannot cope with their credit burden are unlikely to hear a positive response to their application.

Based on the above, several important conclusions can be drawn:

• the mortgage borrower assistance program has as its main goal the provision of real financial assistance to borrowers and their families who, due to objective reasons and force majeure situations, cannot fulfill their obligations in full and on time;
• to participate in it, it is necessary to meet strictly established requirements and restrictions both in relation to the borrower and in relation to the subject of the mortgage (an increase in the monthly payment by more than 30%, unique housing, a loan agreement term of 1 year, restrictions on the area of ​​the property, as well as classification into preferential categories of borrowers and deterioration of creditworthiness);
• the implementation of state support measures is carried out by AHML through agent banks (there are currently about 85 of them throughout Russia);
• the maximum amount of compensation under the contract cannot exceed 30% of the amount of debt or 1.5 million rubles;
• The completion date for the program has not yet been determined, since quite recently (08/11/2017) a decision was made to extend it and allocate an additional 2 billion rubles.

Who can apply

The residential mortgage loan restructuring program applies to the following categories of borrowers:

• parents or guardians of one, two or more minor children;
• disabled people;
• families with disabled children;
• combat veterans;
• families with dependent persons under the age of 24 who are students, graduate students, interns, trainees, etc. and receive full-time education.

In addition, all citizens applying for compensation must have Russian citizenship. Joint and several debtors who meet the above criteria are also covered by the program.

However, this is not enough to get a mortgage write-off of up to 600 thousand rubles. Additionally, the borrower must document that:

• the total average monthly income of the family after repaying the obligatory monthly loan payment for the last 3 months does not exceed twice the minimum subsistence level for each family member.
  

  As of the 1st quarter of 2020, the monthly cost of living for the working population is 10,701 rubles, children – 9,756 rubles, pensioners – 8,178 rubles.

  These data are calculated for the entire country. To determine the adequacy of income, the subsistence minimums established in each subject of the Federation are accepted, and they may differ from the above;

• the property that serves as collateral for the loan is the borrower’s only home and meets the requirements established by law.

Under what conditions is support provided to mortgage borrowers?

State support for mortgages in the event of a decrease in income is provided once and only for those mortgage loans that were restructured before May 31, 2017. The amount of assistance is:

• 20% of the loan balance, but not more than 600 thousand rubles - for parents or guardians, as well as borrowers who are dependent on a student, graduate student, intern, etc. full-time students under the age of 24. Although a year earlier the borrower could only count on a return of 10 from the mortgage from the state;
• 30% of the loan balance, but not more than 1.5 million rubles for all other categories of debtors.

Real estate requirements

Compensation for a mortgage from the state also depends on the real estate that serves as collateral. Housing must also meet certain criteria:

• Total area: no more than 45 m2 for a 1-room apartment, 65 m2 for a 2-room apartment and 85 m2 for a 3-room apartment.
• The price of 1 m2 should not exceed by more than 60% the cost of similar housing in the given region. All statistics on real estate prices by constituent entities of the Federation are available on the AHML website.
• Absence of full ownership of other residential premises, while the borrower or his family members are allowed to own a share of other apartments or houses in the amount of no more than 50%.

The borrower confirms the fulfillment of these requirements with his free written application. If it turns out that the information specified in the document is untrue, payment of the mortgage by the state is canceled. The requirements of the paragraph on the size of the total area do not apply to debtor parents or guardians of three or more minor children.

Possible restructuring schemes

To understand more clearly what mortgage loan restructuring is and how it can solve the borrower’s financial problem, you need to understand its possible forms offered by banks. So, what can a borrower who applies for this procedure expect?

• Extension of the loan term. In this case, the bank reduces the monthly payment amount or interest by increasing the mortgage term. This scheme is good because the borrower can deposit small amounts, gradually repaying the debt. The downside is that the loan term extends over several years, and when the borrower’s solvency is restored, this form of restructuring may be more expensive.
• Reducing the monthly payment amount for a certain period of time. Typically, when choosing this form, banks allow the client to deposit smaller amounts over a period of 6 to 24 months. The use of this scheme is advisable if the borrower’s financial difficulties are temporary.
• Grace period for payment of the principal amount. This scheme involves the borrower paying only interest, without paying the principal. Such conditions are possible for a period of six months to a year.
• Credit holidays on interest payments. The bank provides the opportunity to repay only the principal debt, without interest, within 6-12 months.
• Individual loan repayment schedule. In this case, the financial institution, based on the client’s situation, draws up individual conditions for the repayment of debt and interest.

The borrower may insist on one of the possible schemes, but the final decision is made by the bank. Also, after reviewing the documents and application, a decision may be made on a combined form of restructuring, which will include several schemes for its implementation.

The advantages of restructuring for individuals are obvious: the borrower retains his living space, a positive credit history is maintained, and the mortgage is paid on more favorable terms. Reviews from borrowers who have undergone the procedure indicate that this is truly the most acceptable way out of the situation. The only caveat: the bank may not approve the application if it considers that the client’s financial situation allows him to repay the debt on the original terms.

What allows you to apply for a review of loan terms

It will be possible to reduce the mortgage by 600 thousand rubles if the restructuring agreement provides for the following points:

• Replacing the currency of the obligation from foreign to national at the Central Bank exchange rate in effect on the date of concluding the restructuring agreement.
• Reducing the loan rate to a level not exceeding 12% per annum.
• The assistance period is 18 months, during which the borrower must repay no more than 50% of the mandatory monthly payment in accordance with the primary schedule calculated on the date of restructuring. In this case, a reduction in the credit burden should occur due to: a decrease in the interest rate;
• transferring the balance of foreign currency debt into rubles at a rate more favorable than the official one;
• transfer to a later date of repayment of the loan body or interest that was not closed during the deferment.

There is no money to pay off the mortgage: what to do?

If you are unable to repay the loan, you can contact the bank to restructure the debt. What is it and how can you go through this procedure?

Mortgage restructuring is a procedure for re-issuing a loan agreement in order to improve debt repayment conditions for the borrower. If a client has financial difficulties and is unable to regularly make payments in the amount specified in the agreement, the bank will accommodate and offer new lending conditions.

There is another way to solve the problem of repaying a mortgage loan - refinancing. Its goal is to enable the client to repay the debt using funds from another bank. The procedure is as follows: the borrower takes out a loan from another bank at a lower interest rate.

What is more profitable: mortgage restructuring or refinancing? Restructuring is possible only in the bank from which you took out a mortgage on the residential premises, and refinancing can be arranged in any bank that provides this service. The benefit of a particular procedure depends on the individual circumstances of the borrower: the amount of debt, the term of the contract, and credit history.

What documents are needed

To qualify for mortgage subsidies, the borrower must write a restructuring application to the lender. In addition, you need to submit:

• passports - yours and your spouse’s;
• children's birth/marriage/divorce certificates;
• combat veteran certificate (if available);
• a document on the basis of which guardianship or trusteeship is established;
• health certificate, certificate or other document confirming disability;
• certificate of family composition;
• a certificate from the university confirming full-time study of a dependent under the age of 24;
• documents on income and employment - income certificate in form 2-NDFL, tax returns, work record book or contract, certificate of pension amount, etc.;
• credit and mortgage agreements;
• technical or cadastral passport;
• extract from the Unified State Register of Real Estate;
• independent expert's report on the market value of real estate;
• restructuring agreement;
• a new loan payment schedule taking into account restructuring;
• other documents that will be needed to confirm certain data.

How to fill out an application for restructuring

To begin the restructuring procedure under the mortgage debtor assistance program, you must first fill out the application correctly. This document has a unified form and is filled out manually. You can download it from the AHML website.

The text of the statement states:

• Full name, date and place of birth of the borrower;
• passport details;
• residential address and address of the mortgaged property;
• details of the loan agreement;
• FULL NAME. family members of the mortgagor and their share of ownership in the apartment/house.

Mortgage restructuring: step-by-step instructions

Despite the fact that the state support program for restructuring a housing mortgage loan has ceased to operate, borrowers may have the opportunity to re-issue the contract on new terms with the bank that issued the housing loan.

Step 1 – Write an application

The main purpose of the application is to notify the bank of the impossibility of paying money on the terms specified in the agreement and to justify its demand for loan restructuring. The application must provide the following information:

1. Full name and contact details;
2. Agreement number, date of conclusion, amount, interest rate and other important information specified in the agreement with the bank.
3. The balance of the debt and the amount paid to the bank.
4. Reasons why restructuring is necessary. This paragraph should describe in detail the current financial situation and the reasons that led to this.
5. The terms under which you can repay the loan. You can specify the monthly payment amount that you can currently make towards the loan.

Step 2 – Collecting documents

Documents for restructuring a mortgage depend on the borrower's situation and the reasons why he cannot pay the loan. The standard list of papers for applying for loan restructuring looks like this:

• Passport.
• Certificate of income form 2NDFL from the place of work for the last 12 months.
• Certificate from the labor exchange (upon dismissal from work).
• Certificate from a medical institution (if the need to restructure the loan is related to illness or disability).
• A copy of the work book.
• Receipts for payments made.
• A copy of the loan agreement.
• Insurance agreement, guarantee agreement.
• A copy of the mortgage for the apartment.
• Other documents proving the impossibility of paying the debt on the original terms.

Additionally, the bank may request a marriage certificate, military ID, and documents confirming the ownership of valuable liquid property.

Step 3 – Submission of application and documents

Where should I go to restructure my mortgage? Contact the bank where the loan was issued. You can submit an application and the necessary documents either in person at a bank branch or via email. Consideration of the application lasts from 1 week to a month, so you should not delay submitting documents, since even more interest may accrue during the processing of the application for late payments.

Time to make a decision on restructuring

The final decision on restructuring with the participation of state aid is made by AHML based on documents sent by the creditor. In accordance with the rules, the bank is obliged to send the agency an application for restructuring no later than the 10th working day of the month following the reporting period.

Within 20 working days, AHML checks the documents, as well as the borrower’s compliance with the criteria established by law, and makes a decision to pay or refuse compensation for losses to the bank. If AHML requires all documents related to the loan transaction to be verified, the deadline for making a decision may be extended by another 15 working days. AHML notifies the creditor of its decision within 5 working days from the date of acceptance of the documents and then, within the next 5 working days from the date of sending the notification, transfers the amount of compensation to the creditor's account.

Thus, before receiving 200 thousand from the state to repay the mortgage, the borrower will have to wait at least a month and a half for a decision.

Bank restructuring

Not all debtors meet the criteria to qualify for government assistance. In addition, budget funds tend to run out quickly. So, for example, as of June 1, 2020, AHML no longer had money for compensation.

However, not all mortgage borrowers have managed to solve their problems, and some have only now encountered them. Therefore, in order to avoid delays and subsequent deterioration of credit history, it is recommended to use standard bank restructuring programs.

A bank can reduce its loan burden in the following ways:

• increase the term of the loan agreement;
• provide a temporary deferment of payment on the loan body;
• reduce the interest rate.

A financial institution can use one of the above methods or two at once. The main thing is to have a positive effect.

It is worth noting that each region has developed its own federal program to compensate citizens for part of the costs of paying a mortgage. With its help, you can also reduce the credit burden on the family budget and avoid overdue payments. However, the amount of funding for the program depends on the level of the region’s budget, which seriously reduces the chances of using it. But you still have to try. You can find out how to take advantage of the federal program from the department responsible for housing in your local municipality.

Mortgage restructuring with the help of a real estate agency

The massive deterioration in the solvency of borrowers has contributed to the emergence of various kinds of consulting firms that, for an additional fee, promise to provide assistance in debt restructuring. Real estate agencies also decided to increase their profits. After all, their activities are directly related to transactions in the real estate market. However, as practice has shown, it is better for borrowers to contact the lender directly, bypassing intermediaries - this will make it possible to save not only time, but also money.