BAKU, Azerbaijan, November 16. The world uses a fairly wide range of tools and measures aimed at providing the population with housing, increasing the affordability and quality of housing, Director of the Treasury Department of the Azerbaijan Mortgage and Credit Guarantee Fund (MCGF) Ilhama Isabalayeva told Trend on November 16.
According to Isabalayeva, certain state interventions in the housing sector and coordination of housing policy are necessary for any country, and in any economic system.
Implementation of the above measures may have national features, she said.
"In Azerbaijan, the issue of improving the living conditions of citizens from different social groups is one of the priorities of the state's social policy. Currently, the state policy in the field of housing for various categories of the population is being implemented in several areas, and large-scale and consistent measures are being taken,” the department’s head explained.
“In this regard, we can point out measures aimed at providing housing for certain groups of the population in need of state support and social assistance, including military personnel, cultural and art workers, persons with special achievements in the field of sports at the expense of public funds," Isabalayeva noted.
The director of the department stressed that large-scale measures are being implemented to return former internally displaced persons to their native lands and ensure appropriate living conditions for them.
"In this context, in accordance with international practice, mortgage lending is one of the important instruments of the state's social policy in terms of improving the provision of housing to the population,” she also noted. “An important step in creating an organized housing mortgage lending market in the country was the establishment of the Azerbaijan Mortgage Fund by Presidential Decree in 2006. In accordance with the mandate, the fund performs the functions of an operator of the secondary mortgage lending market.”
“Over the past period, as part of the state policy to create an effective system of mortgage lending, a number of measures were implemented to improve and increase the availability of mortgage lending, the necessary infrastructure for the mortgage lending system was established, and targeted work was carried out to boost the transparency of the mortgage lending system," she added.
Isabalayeva also pointed out that the regulatory framework for mortgage lending has been developed, unified standards for the issuance, underwriting, maintenance and refinancing of mortgage loans have been created, and a wide network of authorized organizations of the fund has been formed.
"Out of 25 banks operating in the country, 24 are authorized banks of the fund for issuing mortgage loans, 18 insurance companies and 19 appraisers also received the status of authorized institutions of the fund in the mortgage lending market,” the department’s head said. “In order to increase the availability of mortgage loans for people with limited savings, with the participation of international experts, a tool for guaranteeing mortgage loans was developed and put into practice.”
“In order to protect the rights and interests of borrowers, facilitate and increase the flexibility of servicing a loan during a period of a borrower’s temporary financial difficulties, a mechanism for restructuring a mortgage loan, as well as transferring loan obligations to a third party has been put into practice," she further said.
Besides, according to her, an important step towards increasing the transparency of the mortgage lending market, minimizing the costs of obtaining a mortgage loan, and improving the quality of services for issuing mortgage loans was the approval of the regulation on the electronic mortgage system and credit guarantee by the Azerbaijani president’s decree.
"Following the decree, all business processes related to mortgage lending, including the application of a potential borrower, primary underwriting, obtaining the necessary information about a potential borrower, processing and refinancing a loan by the fund have been automated," Isabalayeva explained. “All conditions have been created for servicing the loan through online payments. A system for ensuring the liquidity of the mortgage market has been established and is functioning effectively.”
“The regulatory framework for the market for long-term financial instruments was approved, secured by residential mortgage loans. Mortgage bonds make up nearly one-third part of the total securities market in the country. An electronic mortgage system has been introduced,” she said. “In order to ensure the adequacy of the mortgage lending system to modern requirements and challenges, the fund regularly organizes meetings and discussions with authorized organizations, and conducts public surveys.”
“The proposals of market participants, and the survey results are analyzed and, on their basis, an appropriate package of additions and changes is prepared," the fund’s representative stressed.