Romania’s Government recently decided several important changes in the regulations for mortgage lending and debt recovery, via emergency ordinance.

The new rules went into force on Friday, September 30.

According to the emergency ordinance, local banks will have to look for solutions to help mortgage clients who have difficulties in repaying their loans reduce their financial burden before foreclosing on them, reports local Profit.ro. However, the new rule will only apply for loans contracted from now on and not for existing loans.

The foreclosure will start at least three months after the bank declares the client’s default and this will apply to all mortgage loans, including the ones already granted. At the same time, clients can ask their creditors for a six-month grace period to try and sell the mortgaged property themselves before the default is officially declared or before the foreclosure procedure starts. Clients thus have about nine months at their disposal from the moment they stop paying their instalments until the banks can start the foreclosure procedure.

The Government has also introduced stricter rules for debt recovery firms. The collectors will not be allowed to go after bad debtors at their work place, to call them at night or to post notices or summons on their doors. They will also be forbidden to contact the debtors’ relatives or friends.

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