The Moscow Oblast authorities have promised to carry out a housing revolution, armed with the experience and money of Spanish banks.
Starting in January 2002, the special program "The Founding of a System of Residential Mortgage Lending in the Moscow Oblast in 2002-2003" began to be implemented in the Moscow region (further – the program), alongside the Oblast law "About the Organization of a System of Residential Mortgage Lending in the Moscow Oblast."
As of now, 14 municipal divisions are taking part, in particular, the Mytishchy, Podolsk, Zaraysk, Lukhovitsy, Elektrostal, Sergeyev Posad, Shakhovskoy, Odintsovsky and Yegoriyevsky districts, as well as others. As General Director of the Mortgage Corporation of the Moscow Oblast public corporation Vladimir Maltsev explained, these are cities and districts which had managed to collect the set of necessary documents at the time of the corporation’s formation and were among its founders. At present, negotiations are being held with other municipal divisions with the aim of their participation in the mortgage program.
Before undertaking the implantation of a system of mortgage lending in the Moscow Oblast in practice, experience accumulated in the United States and Germany was studied carefully. However, the most active cooperation is being held with Spanish businessmen.
In March, a delegation from Spain led negotiations with the Moscow Oblast government. The Spanish side included Rafael Arnais Eguren, general secretary of the International Center of Registration Rights, Jose Rodriguez Sanchez, a member of the Presidium of the Board of Registrars of Spain, and Rafael Sans Compani, legal adviser for the banking group Banco Bilbao Biscalla Argentaria.
A country with a population of 40 million people, Spain has registered approximately 10 million mortgage agreements. Simple calculations show: In 2001 every fourth Spaniard was granted credit for the acquisition of housing. On average, credit was issued to every family. When the mortgage market began to take shape in Spain in 1982, the real balance (liabilities in mortgage credit) amounted to $11 billion; today, 20 years later, this figure equals $270 billion. Moreover, the annual percentage rate has fallen from 18 percent to 4.5 percent, and the repayment period, on the contrary, has increased from 10 years to 25 years.
Moscow Oblast Governor Boris Gromov is expecting the Pyrenees experience to take root in the Moscow region. The regional government, relying on Spanish help, is planning to carry out a revolution in the area of mortgaging within the next two to three years – on the territory of the Oblast, at least. There is a possibility of receiving support from a number of Spanish organizations, including banking structures that look approvingly upon Russia’s projects.
Maltsev of the Mortgage Corporation of the Moscow Oblast proposed that in the future, housing on credit will be granted to the extent that it is needed and to all who want it. The regional mortgage-lending consumer cooperative society of the Moscow Oblast will perform as the primary creditor of the population.
The construction industry is on the rise in Moscow Oblast. In 2001, 2.7 million cubic meters of housing were completed and, according to predictions, this year 3 million cubic meters will be built. In volume of residential construction, the Oblast is second only to the capital.
The implementation and propagation of mortgage lending is not only a promising prospective business, but a socially significant one, too, according to the regional government.
The implementation of the mortgage program in the next two years and a law being prepared for approval in 2003, "About the Special Regional Program: ‘The Development of a System of Mortgage Lending in the Moscow Oblast in 2004-10’" will allow thousands of families living in the Moscow Oblast to solve their housing problems or improve their living conditions.
The only "but" is simply that Spain, for all its mortgage success, is not the world leader in mortgage lending. By comparison, in the United States the volume of mortgage lending exceeded $1 trillion long ago. All the same, companies promoting a program of mortgage lending in Russia using U.S. investments in their businesses simply have not been able to actually take hold in Moscow Oblast. Thus far, Russia has not been an area of particular interest for Spanish capital; therefore, it is difficult to count on the quick success of the Pyrenees model in Moscow Oblast.