Azerbaijan, Baku, May 22 / Trend , U. Ismayilova/
Mortgage lending via Azerbaijan Mortgage Fund (AMF) at the Azerbaijan Central Bank (ACB) will resume in Azerbaijan from June 1, 2009. The mortgage lending was suspended in summer 2007, Texnika Bank Supervisory Board chairman Etibar Aliyev said.
"Terms of mortgage loans are not expected to change once lending resumes," Aliyev said.
The Central Bank and the government have designed a broader model of mortgage lending, which provides for social and commercial mortgages.
According to the Central Bank, step-by-step start of mortgage lending with effective interest rate will help to eliminate excess supply in the market in the long run and complete construction of houses. This will revive construction market and related sectors.
The primary mechanism opposition mortgage lending is to release AMF securities.
"Their emission is allowed by the legislation and the Central Bank is ready to guarantee mortgage papers," ACB head Elman Rustamov said earlier. "They will be brought to the level of guaranteed securities, which will provide them with liquidity in the market and will lead to increased mortgage market."
Rustamov said interest rates on mortgage loans are not expected to change.
"Although one of the principles of commercialization of mortgage lending is a change in rates, but we made changes to our principles in this situation. So we do not plan to change interest rates," Rustamov said. "In the context of global processes will need to simplify the conditions for borrowers of mortgage loans."
Loans should be given to borrowers with stable income as global crisis first started on mortgage market, he said.
Azerbaijan Mortgage Fund has refinanced mortgage loans worth 63.3 million issued by authorized banks. This makes up 93 percent of the total mortgage portfolio. Banks issued mortgage loans worth 67.9 million manat from March 2006 to June 2007, when the AMF actively financed purchase of housing.
Azerbaijan state budget for 2005-2008 allocated 80 million manat in mortgage lending through the AMF provides. About 68 million manat has already been allocated.
Nearly 14.5 million manat have been allocated by the 2009 state budget to finance social mortgage.
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