Mortgages more expensive

07.12.2009 15:50
Borrowers will have to pay for the decline in title insurance segment. They are forced to buy policies are not for 3-10 years, as required by the banks today, and throughout the term of the mortgage - up to 20-30 years. Only in this way the UK will be able to cover their losses from the slowdown of mortgage lending in the country.

Title insurance, which implies compensation for the cost of housing in the cancellation of property rights owner, today is a purely bank views. At the time of mortgage loans in the secondary market purchase of title insurance policy - compulsory for financial institutions. Every year he manages in 0,3-0,9% of the cost of housing. Now about 99% of title insurance is part of affiliate programs with the banks. On the one hand, such dependence on bank guarantee in the UK for several years to expand its client base and increase in fees, on the other - resulted in a rapid decline in the first half of this year. Slowing down of the mortgage market directly affected the volume of insurance payments for title insurance. In January-June, they fell twice over the same period last year.

Title insurance - is one of the most profitable in our country. And 30 SC active in this segment, painfully treated to reduce its profits. Until recently they were, thanks to tiny amounts, were quite impressive. Realtors estimated that each year the country is annihilated, only about 2% of transactions on sale of real estate. The most common are the following reasons: lack of agreement on a deal first-degree relatives of the seller (wives, children, parents), the sale of housing minors or incapacitated persons, the arrest of its tax authorities with large debts of previous owners. In addition, the buying and selling real estate is repealed in the case of fraudulent acts, such as processing transactions on fabricated documents.

However, the paltry payment of title insurance does not explain just enough to calm the situation in the area of ??registration of transactions of buying, but the UK and manipulations themselves. They meticulously the monitored insured property. The Security Service of the insurance company can track the history of housing, check with the ZhEKe and BTI. And therefore questionable objects that have a long history of re-sale or apartments that might be claimed relatives of the former owners refused to accept the insurance. Low loss factor is also achieved through the complexities that are satisfied with the insurers to their clients. Problems arise in obtaining redress in the event of cancellation of purchase and sale of real estate. After termination of the deal going through the courts, and to obtain compensation IC requires a copy of which entered into force on the court decision about the loss of ownership of real estate. And it must act before the expiration of the contract, and comply with this requirement is rarely anyone can: the insurance contract is valid until one year, and courts can go much longer.

In addition, savings allows a wide range of exceptions to the title of most IC programs. For example, the payments do not cover cases of loss of ownership of an apartment because of the treatment on the recovery of the real estate bank of fraudulent acts by third parties or seizure by the authorities. That is why the compensation in this segment are a genuine rarity.

Although today the bankers are doing is not the most optimistic projections for growth in mortgage lending in the country, observers believe that resourceful UK will find a way to recoup their losses from the decline in lending to real estate. They predict banks review the basic insurance requirements for borrowers: the extension of title insurance for the duration of the mortgage. Now the citizens buying property in the loan required to buy title insurance policy from three to ten years in a row (every year buying new insurance). It is so much in our country is the statute of limitations on transactions of purchase and sale of real estate. And only in rare cases cause bankers to extend the coverage throughout the term of the loan agreement, that is up to 20-30 years.

However, even if insurers will lobby in the partner banks such innovations to continue preying on borrowers, long fallen into mortgage debt bondage, get off at last year's volume, they will not. The most optimistic forecast of title insurance in Ukraine by results of work in 2008 did not exceed 100 million USD. Then there will be 20 million USD. less than the results for 2006-2007.

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