IN THE NEW MORTGAGE SYSTEM New apartments aren"t better as loan securities than older ones

Recent apartments don"t always represent a better security then old ones, in accessing a mortgage. Adrian Vasilescu, counselor to the Governor of the National Bank of Romania (NBR), said in a statement: "The issue is not how cheap or how expensive an apartment is, or whether a home is old or new. Each case will be studied individually. A new apartment may not be a better security then an old apartment, in some cases. If the person buying a new apartment owns other homes, then that apartment does not represent a good security because that person can give up on the mortgage at any time. Whereas when a buyer acquires an old apartment for its own use and pays a bigger down payment, that represents good security because that person will do its best to keep up with its mortgage payments".

Mr. Vasilescu said that the NBR tried to support mortgage lending through the regulations it has recently approved, which encourage the acquisition of homes for private use. The new system is more attractive to those who acquire homes by paying a 50% down payment on the value of the apartment.

Banks will carefully study every application before lending money, as their resources are limited, and the evolution of home prices is not yet stable. Adrian Vasilescu further said that a drop in the price of homes is to be expected as available lending sources are limited and homes are not selling as fast they did: "Developers will have to make new price cuts, as the financial resources of buyers are extremely limited".