Solving the mortgage problems the Russian way

[Tulpen]

"Russia's Rosevrobank, a mid-sized lender, has asked clients to pay back their mortgages right away rather than risk the prospect of real estate prices falling 30 percent, the bank said on Friday. "We are warning clients that they are in a crisis situation, that we are in this situation with them, and that both of us need to create a certain pillow of support," Elena Safyanova, the bank's head of communications, told Reuters. "

:eek:

http://www.cnbc.com/id/27113905

[blazespinnaker]

Re: Solving the mortgage problems the Russian way

"But she said borrowers would be better off paying back their mortgages now, as their financial well-being could quickly deteriorate given the present state of the economy."

Uhhh, ok, how exactly would they be better off?

""There is also a crisis on the labour market, so they may be left without work or have their pay cut ... We should all try to close our debts now before it's too late," she said."

Oh boy, that leaves me in hystrerics. I'm sure something must have gotten lost in the translation, though..

[c1ue]

Re: Solving the mortgage problems the Russian way

That is actually a public service message.

The real underlying hint? If times start getting bad, the bankers will start calling loans.

That's what happened in the Great Depression: those with small mortgages got called, those with mortgages larger than home values were not.

After all, calling a mortgage which is worth more than the collateral is just a loss, but calling a mortgage with positive underlying collateral is a potential profit - or at least a cash infusion.

So better to be prepared!

[VIT]

Re: Solving the mortgage problems the Russian way

I found what he told on radio station of Echo-Moscow:

CEO of RosEvroBank suggested (not demanded) to those who has the mortgage especially in USD rather then in rubles try to pay-off the debt quicker since some predict fall of real estate as much as 30% and taking into account rise in USD vs rubble exchange rate. He referenced to CB rule of loan call when collateral lost the value. He mentioned that 10% of the clients already started to pay of the debts quicker.

I see it as reasonable call.

[GRG55]

Re: Solving the mortgage problems the Russian way

I found what he told on radio station of Echo-Moscow:

CEO of RosEvroBank suggested (not demanded) to those who has the mortgage especially in USD rather then in rubles try to pay-off the debt quicker since some predict fall of real estate as much as 30% and taking into account rise in USD vs rubble exchange rate. He referenced to CB rule of loan call when collateral lost the value. He mentioned that 10% of the clients already started to pay of the debts quicker.

I see it as reasonable call.

Compared to this...

"If we all join hands and go buy a new SUV, everything will be all right. Preferably a Navigator.... just go out and buy something." - Dallas Federal Reserve President Bob McTeer, October 11, 2001.

...I would have to agree with you.

[VIT]

Re: Solving the mortgage problems the Russian way

Compared to this...

"If we all join hands and go buy a new SUV, everything will be all right. Preferably a Navigator.... just go out and buy something." - Dallas Federal Reserve President Bob McTeer, October 11, 2001.

...I would have to agree with you.

I call this approach experience vs logic. Once it worked out well so many just repeat this idea as mantra.