Mortgage borrowers could gain relief if a forced sale does not cover the full loan amount. At the 21st All-Russian conference on mortgage lending, Anatoly Aksakov, chair of the State Duma Committee on the Financial Market, outlined a potential policy shift. He suggested that when the sale price falls short, the bank would absorb the shortfall and the borrower could have the remaining debt erased. This outline was reported by RIA Novosti and summarized for readers elsewhere.
In his remarks, Aksakov described an upcoming initiative intended to relieve borrowers in such scenarios. He proposed that if a property is sold at a lower price and the proceeds do not fully repay the loan, the debt would be discharged on behalf of the borrower, transferring the risk from the consumer to the lending institution. The proposal, he indicated, would be sent to the State Duma soon for consideration and potential legislative action.
At the event, Alexander Danilov, head of the Central Bank unit responsible for banking regulation and analytical work, provided a concrete illustration. He described cases where a home is sold for far less than the loan balance, leaving the borrower still owing money to the bank. Aksakov echoed this concern in informal discussions, explaining that borrowers can end up with a debtor status even after a sale if the sale price does not cover the loan.
From the sidelines, Aksakov clarified to reporters that in many cases the market value of a house drops well below the outstanding debt. He emphasized that the resulting deficit could become the bank’s burden, and that the borrower would be relieved of the debt entirely once the sale is completed and the discrepancy is absorbed by the lender. This approach would remove a portion of the risk currently carried by families facing foreclosures, effectively shifting the cost back to the credit institutions involved in mortgage lending.
The discussion arrives amid broader concerns about mortgage accessibility and housing market stability. Earlier reporting by RIA Novosti indicates that the share of mortgage loans with arrears over 90 days reached a high level not seen since mid-2021, with tens of thousands of loans affected in January. These figures underscore the potential impact of any policy adjustments on households and lenders, prompting careful analysis of how such changes might affect loan servicing, bank capital requirements, and consumer protection rules. [citation: RIA Novosti]
Supporters of the proposed change argue that it could prevent a perpetual debt trap for borrowers who lose equity when homes are sold under distress conditions. Opponents warn about possible implications for lending discipline, collateral valuation practices, and risk pricing across the mortgage market. The debate reflects a delicate balance between safeguarding homeowners from punitive debt, maintaining access to credit, and ensuring that banks retain viable incentives to lend. The outcome will hinge on legislative debates in the Duma, regulatory reviews, and how policymakers weigh the interests of borrowers against the prudential needs of financial institutions.
As the dialogue continues, industry observers stress the importance of transparent criteria for when and how such debt relief would apply. They also emphasize the need for robust appraisal standards, clear sale procedures, and safeguards that prevent potential misuse of the policy. The evolving discussion signals a broader push to align mortgage terms with realistic market dynamics while preserving the overall health of the housing finance system. Observers caution that any reform must be structured to avoid unintended consequences, such as moral hazard or destabilizing incentives for lenders or borrowers alike. The central question remains: can a policy that shifts loss from borrower to lender stabilize the system without compromising responsible lending and consumer protection? [citation: industry analysis]