Liability for the mortgage loan for real estate

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Many Poles may think that a home loan holder is responsible for the outstanding debt only with a house or flat. This is sometimes the opinion even of people who took out a mortgage secured loan themselves. In practice, the situation looks less favorable for housing borrowers, who are responsible for all their assets with their debt.

The Ministry of Justice has recently announced that it wants to change this principle. It is worth looking at the interesting proposals of the said ministry. The Polish Financial Supervision Authority has also been talking about limiting the borrower’s liability to housing only for some time. However, in the case of the PFSA’s proposal, this “keys for debt” option will be optional for banks.

The revolution is only for new borrowers …


In November 2018, national media began to inform about interesting plans of the Ministry of Justice, which concern changes in the rules for granting housing loans. The current management of this important department believes that the borrower’s liability should be limited to housing.

Under this model, which is used in the United States, a bank client can be released from credit liability after the keys to the premises or house have been transferred to the lender. Hence, in the Polish media the term “keys too long” often appears. This mechanism is obviously detrimental to banks, which have to face a higher risk. It is the impact of the debtors ‘limited liability on the principles of banks’ operations seems to be the biggest problem in introducing the change proposed by the Ministry of Justice.

Contrary to the expectations of many current home loan holders, the possible introduction of the “keys for debt” option will not extend to previously concluded contracts. Such a change would mean a serious increase in the risk of operations for banks that provided “mortgages” considering the possibility of enforcing debt from May Customer center.

It can be expected that the introduction of the “keys for debt”

It can be expected that the introduction of the "keys for debt"

The mechanism would significantly tighten the rules for granting new mortgage loans and result in an increase in the required own contribution, for example to 40%. The question arises whether such a change would be beneficial from the point of view of the state housing policy. It is worth recalling that by 2030 the government wants to achieve the EU average in terms of the number of flats (premises and houses) per 1,000 people.

Due to all the above-mentioned reservations, the proposal to limit the mortgage borrower’s liability to the apartment only, for the time being, it should be treated without major emotions. The Ministry of Justice itself, in response to considerable media interest, stressed that the proposals regarding “mortgages” are for the time being preliminary. Their fate will depend, among others, on European Union legislation. As for the “keys for debt” principle, it seems more likely to implement the solution proposed by the PFSA.

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