The First House program will be excluded from the new law on mortgage laws, after the Social Democrat Party (PSD) has reached an agreement with the National Liberal Party (PNL).

“We don’t need to fix what’s not broken. The First House program doesn’t have reimbursement difficulties,” said Bogdan Olteanu, central bank deputy governor.

Within the program, banks give loans with a down payment of only 5%, because they get state guarantees, Olteanu explained.

The new law allows mortgage debtors who can’t repay their loans to give the mortgaged assets to the bank and stop paying back the loans. According to the law, which was passed by the Parliament at the end of last year, but was sent back by President Klaus Iohannis for review, the debtor won’t have to pay anything else to the bank, even if the value of the property doesn’t cover the remaining amount to be reimbursed.

editor@romania-insider.com