Changing the game

Both developers and financial institutions are paying more and more attention to the amended land and mortgage register act. The new regulations, which entered into force on 20th february 2011, significantly modify the previous market practice for the calculation of mortgage amounts, as well as introduce new solutions for over-securing and empty mortgage entry Before the amendment of the law, banks calculated the capped mortgage amount only in relation to the amount of the secured loan, at the level of 130 pct to 200 pct of the principal of the loan, so that apart from the principal amount it includes related costs, such as default interest or contractual penalties. For the majority of financial institutions, it was of no importance that the value of secured receivables could be much lower than the mortgage amount. After the enactment of the new regulations, the method for calculating mortgage amounts will have a significant impact on the incidence of risk of excessive mortgages, i.e.