Mortgage Bank Rating

    Over the past year, the mortgage lending market showed good growth results and approached the figure of $ 5 billion against $ 3 billion in 2006. The three leaders in terms of the volume of mortgage loans issued in 2006, compared with the results of the first half of the year, changed. The first two leaders, Sberbank ($ 4.3 billion) and VTB 24 ($ 756.7 million), were joined by Moskommertsbank ($ 620 million), pushing Deltacredit from third to fifth.

    The undisputed leader in increasing volumes among large mortgage banks was KIT Finance, which increased volumes from 3 to 277.7 million dollars over the last year of operation. The second “in speed” of growth was the Moscow Bank for Reconstruction and Development, which increased its volume by 72 times, from 1.4 million to 105.3 million dollars. Transcreditbank showed good growth rates - almost 36 times, up to 241 million dollars.

    According to Maria Serova, Head of VTB 24 Credit Products and Partnerships Development Department, in the context of high growth rates in real estate prices, mortgage lending is almost the only effective tool for solving housing problems for most Russian families. The observed growth in the mortgage lending market in 2006 is partly the result of the rapid rise in housing prices.

    Over the past year, banks have significantly expanded their lending programs, which could not but affect the volume of the market. As the most interesting, experts distinguish loans with a zero down payment, loans with a floating rate, loans for rooms, as well as programs for refinancing mortgages, pawnshops, loans for the purchase of suburban real estate. According to the deputy head of the sales department of the City Mortgage Bank, Mikhail Busygin, one of the trends this year in the mortgage market will be a significant expansion of the product line of mortgage banks. This will allow the general public to choose a mortgage suitable for them.

    Almost all experts agree - this is only the beginning of the growth of mortgage lending. “According to all forecasts, the volume of the mortgage market should grow another 2 times. We follow the path of all countries of Eastern Europe, where from the moment the market began to develop, double growth was observed for 3-4 years. We have actually just entered this phase of growth. But to the Eastern European market, where 30-40% of real estate transactions are carried out with the help of a mortgage, we are still very far away to catch up with them, we will need several years of double growth, ”says Olga Bazanova, marketing director of the Deltacredit mortgage bank.

    With the development of the mortgage market, the refinancing sector of previously issued loans is actively developing. It allows borrowers to reduce the cost of paying interest by refinancing with other banks at more favorable interest rates. According to Tatyana Voznesenskaya, Chairman of the Board of Russian Mortgage Bank, “we should expect a significant increase in proposals related to the re-lending of previously issued mortgage loans. This service will be in demand and will be developed in connection with the continuing decline in mortgage interest rates. "

    In 2007, we should expect further development of securitization of mortgage loans by banks. “Securitization is perhaps the most important source of mortgage refinancing for our banks, which is very important for the general low capitalization of the Russian banking system. It’s also a direct tool to reduce interest rates for borrowers by attracting cheaper funding, ”says Albert Khisametdinov, First Deputy Chairman of the Board of Moskommertsbank.

    However, for its development, amendments to the Federal Law "On Mortgage Securities" are necessary. “The insurance issue,” says Olga Bazanova, marketing director for Deltacredit Mortgage Bank, “holds back the issuance of mortgage-backed bonds. There is an urgent need to adopt a number of amendments to this law. Also in the field of securitization of mortgage assets there are some difficulties. We very much hope that the Central Bank will revise the capital adequacy requirement for banks that issue mortgage-backed bonds. Today it is 14%, while for other banks the capital adequacy requirement is kept at 10%. Such increased attention on the part of the regulator is very hindered, since with due attention of the organizers to the quality of the release,

    A reduction in the Central Bank refinancing rate, according to many banking experts, will not greatly affect the market situation. “Most likely, in any way,” says Grigory Ivashchenko, head of the retail lending department of TransCreditBank retail business, “the refinancing rate of the Central Bank has not reflected the cost of resources for the bank for a long time. Perhaps, some banks will be followed by a slight decrease in interest rates on loans issued in Russian rubles. But this will not happen immediately, but within a period of 1 to 6 months. ”

    Assessing the prospects for the development of mortgages from the point of view of attracting customers, against the background of tougher competition, banks are trying to occupy still free niches, for example, the regional or primary housing market.

    Since mortgage offers do not keep pace with rising real estate prices in large cities, many banks are guided by the development of mortgages in the regions. Real estate prices there are not very high, and the population can afford to purchase it on a mortgage. So, according to Albert Khisametdinov, First Deputy Chairman of the Board of Moskommertsbank, the bank sees high prospects for the development of mortgages in regional markets.

    Offers on the secondary housing market are theoretically limited, unlike the primary, whose growth depends only on the volume of construction, which is constantly growing. According to the statistics of banks, only about 30% of the total volume of issued mortgage loans falls on the primary housing market, which is quite small in the total volume of the real estate market. Thus, this market direction is very attractive for providing mortgage loans. According to Grigory Ivashchenko, head of the retail lending department of TransCreditBank's retail business department, in 2007 an increase in the number of loans issued for the purchase of apartments in the primary housing market is possible.

    “The growth in mortgage lending will be promoted, first of all, by an increase in housing construction. - says Oleg Skvortsov, Deputy Chairman of the Board of Absolut Bank. “Since today, the current needs of the population in new housing are not being met.”

    Among the constraining factors in the development of mortgages, many experts point out the low and non-transparent incomes of Russians, high housing prices and the shortage of supply of quality housing, as well as a low level of public awareness about mortgages.

    Source: Mortgage Brokers Club

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