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Mortgage loans, entry in the land register. Changes – the Sejm started work on the draft of the Ministry of Justice

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Work on the draft amendments to the land and mortgage register regulations has begun in the Sejm. – This project is aimed at preventing banks from charging excessive fees while waiting for an entry in the land and mortgage register – said Deputy Minister of Justice Marcin Warchoł. In his opinion, the additional fees should be treated as a deposit, which will be returned after the entry is made.

It is a government bill amending the act on mortgage loans and supervision over mortgage brokers and agents, prepared by Ministry of Justice. On Tuesday, the first reading of the draft took place during the meeting of the Justice and Human Rights Committee.

– This project is aimed at preventing banks from charging excessive fees while waiting for an entry in the land and mortgage register. These fees include increased margins, bridge insurance, commissions, or various other handling fees depending on the contract concluded between the borrowers and the bank – said Deputy Minister of Justice Marcin Warchoł in the Sejm.

Mortgage loans – entry in the land and mortgage register

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As he pointed out, now in large provincial cities you have to wait over a year for a mortgage to be entered in the land and mortgage register. This is related to the need to pay higher installments at this time by borrowers, to whom banks charge additional fees until an entry in the land and mortgage register is obtained. Additional fees are up to several hundred zlotys a month. – The current system requires a change (…) all additional fees will be refunded while waiting for the mortgage to be entered in the land and mortgage register after the entry has been made – announced the deputy head of the Ministry of Justice. According to the draft, this will only apply to newly concluded loan agreements.

The assessment of the effects of the regulation attached to the draft shows that a single borrower, depending on the length of waiting for an entry in the land and mortgage register, may save from about PLN 500 to over PLN 2,000 on the proposed changes.

The deputy minister pointed out that 99 percent. cases, applications from notaries end with an entry. – So the bank’s risk is minimal, while the situation is extremely unfair. Well, only the bank is protected, and all the additional costs and fees arising from it are borne by the borrower, so we must introduce elementary decency and fairness in this regard – Warchoł emphasized.

In his opinion, the above fees “should be treated as a kind of security deposit”. – If this risk does not materialize, because the entry is made, the bank should return the money – he explained.

The committee recommends the adoption of the bill with amendments. 20 deputies voted in favor, no one was against and no one abstained from voting. According to the agenda, the committee’s report on the bill may be presented at the next Sejm meeting, which will begin on Wednesday, July 20.

Will the rules apply to existing contracts?

The deputy minister of justice postulated that the provisions should cover already existing credit agreements. – I would like to put to the high committee the possibility of extending this in relation to the agreements already concluded. In the draft, we only envisaged agreements to be concluded in the future, but we know what the current market situation is (…), currently housing loans are rare, therefore my proposal to include the current loan agreements with this solution – Warchol said.

The commission’s representatives were surprised by the proposal of the deputy head of the Ministry of Justice. Arkadiusz Myrcha from the Civic Coalition asked if this was an appeal by Marcin Warchoł as a deputy or if it was the position of the Ministry of Justice. As Warchoł said, the Ministry of Justice supports this proposal. – The situation requires that also the loans currently included should be covered by such a regulation, in our opinion. But this committee serves this purpose in order to listen to experts and other deputies and to work out the best project for Poles, explained the deputy head of the Ministry of Justice.

When asked why such a solution was not included in the draft of the Ministry of Justice, he replied: “because the principle is as we all know it (…) the law is not retroactive.” – But this rule includes a number of exceptions, and it is an extremely delicate and difficult issue (…). We acted in accordance with the principle, but this principle has a number of exceptions, if there is such a political will of the parliament, I will gladly applaud it – said Marcin Warchoł.

Main photo source: Shutterstock



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