GFIC proposes to amend the law on mortgage loans debtors give back the keys to housing?

The mortgage payment is secured by a mortgage entered in the land and mortgage register for the bank. Theoretically, the bank can claim a return on the property, but this is rarely the case in practice. The Good Finance Investment Corporation wants to change this soon. How?


GFI proposes to change the law on mortgage loans – debtors will give back the keys to housing?



The Good Finance Investment Corporation would like to introduce an obligation for banks to offer loans with a fixed interest rate and a mechanism to eliminate the debt in return for giving the keys to the house or apartment. 


Keys for debts

Keys for debts


In the United States, borrowing for the purchase of a house or apartment is the norm. American banks are very tolerant of mortgage debtors. If debts arise, the debtor has a liberal consumer bankruptcy model at his disposal. The borrower can easily get rid of the debts, but at the same time, he must give the keys to his home.


Low-affluent and seriously indebted Americans can use the bankruptcy procedure described in Chapter 7 of the Federal Bankruptcy Code, which sets out the principles of liquidation bankruptcy.


Liquidation bankruptcy assumes that only the liabilities up to the value of collateral, e.g. a mortgage, should be subject to absolute debt repayment… So when you use such a mechanism, it is necessary to sell the mortgaged property, as well as to write off the remaining debts.





On the other hand, the less problematic financial situation allows you to take advantage of the milder form of consumer bankruptcy, on the principles described in chapter 13 of the Bankruptcy Code.


In this case, the consumer can retain valuable assets, including real estate, and write off some debts by implementing a repayment plan previously set by the court.


There is no such thing in Poland, which the Good Finance Investment Corporation would like to change. At present, even if the bank takes over the premises that secure the loan, the customer should give back the money from the debt anyway. The GFIC wants to change this and introduce loans based on the “keys for debt” principle.


Fixed-rate loan

Fixed-rate loan


Another proposal from the GFIC is to promote loans with a fixed interest rate. Today, loans bearing variable interest rates predominate, depending on changes in GFIC market rates.


In the future, banks would have to offer loans to customers in which the interest rate would be fixed throughout the loan period, or at least for several years.

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