OREANDA-NEWS. December 26, 2008.  Russia’s Agency for Housing Mortgage Lending (AHML) is to purchase bad mortgage loans from banks for RUB 5-7 bn on a monthly basis, Deputy Regional Development Minister Sergey Kruglik said. “The first operation to acquire mortgages worth RUB 5 bn has already been executed. And similar actions to buy mortgages worth RUB 5-7 bn will be taken every month from now on” – he said. State officials pledged to support the mortgage market during the crisis and not only prevent large-scale defaults, but also maintain the current pace of mortgage lending in 2009.

At the same time, bad mortgage loans have sharply increased in recent months and there is a threat that some of them could grow into defaults because of the possible decline in the mortgage value of residential facilities and the need to repay loans ahead of schedule. Furthermore, even now a number of borrowers are unable to pay back mortgage loans because of unemployment or a decline in household income. The main instrument to save mortgage programs, as AHML plans, should be a special-purpose subsidiary (the Agency for the Restructuring of Housing Mortgage Loans) that is designed to provide assistance to both borrowers and lending institutions.