Banks refusing to take parental benefits to pay out the mortgage
According to Izvestia newspaper, Major Russian banks, such as VTB, Raiffeizen Bank, Gazprombank, MKB,Sovkombank and others are refusing to take parental benefits as a first payment of a mortgage.
Such complaints became widespread at developers forums. Press offices and call centers of various credit organizations confirmed these rumors, stating that most of the banks preferring to work with personal savings of a borrowers. Only Sberbank reassured its readiness to take parental benefits as a first payment of a mortgage on the condition that developer is willing to wait untill these funds are transferred from Russian Pension Fund (RPF).
The problem is that state benefits for improving living conditions can be only transferred once the deal of buying real estate is agreed upon. In order to do this, concerned citizen must apply a form in RPF. Because of red tape developers must wait up untill 3 months to receive these benefits, which severely slows the construction and looks and affects financial reports.
So its no surprise, that most of developer companies doesn’t want to wait that long. And banks, that willing to participate in this state-funded program are forced to use their own capital, and wait for RPF to compensate them after.
Yet this practice was adopted mostly by small credit organizations without nationwide branch office network, while big sharks were not so eager. Besides, not every developer is happy to cooperate with small credit organizastion in the first place. That is why many families that have a right to receive such benefits unable to do it in reality.
Meanwhile, big banks are not willing to put their money at risk, noting that will only accept people’s own savings. They can do it legally, using loophole in legislation stating that state benefits can be considered as citizen’s own savings, yet big sharks interpret it in a way that only de-facto transition of the funds into the bank can be only considered as an act of a first payment, not the entitlement to receive them.
The other reason why big money avoiding to working with parential benefits is that they view borrowers applying for a mortgage using state support as nonreliable.
According to TKB bank expert Vadim Pakhalenko, «It’s the will of the client to use his own savings shows to the bank capability to honour his obligations in due time. The lesser is amount of a first payment, the more risks that a borrower will go bankrupt. Most disciplined borrowers usually can pay up to 40-50% of a loan».
All of these factors significantly decrease a number of deals with use of parential benefits.
As we can see, the system of mortgage lending in capitalist Russia is focused on getting higher profits, not on supporting people trying to get housing. This is equally true for a banking system as a whole. Any government attempt to force banks to comply will be resisted and neutralized by using loopholes in legislation, as we can witness nowadays.
Owners of capital don’t care about people, how bad their situation is or how many children they got, they are only interested in profit, and they will bleed people dry while can.