– From February and for twelve months, the Government will establish a mechanism for the convergence of the installments corresponding to UVA mortgage loans that implies a shared effort between financial institutions and debtors.
– This mechanism avoids the 26% jump in the quota planned from February and, instead, establishes a convergence over 12 months.
– It is expected that, in no case, the quota may exceed 35 percent of family income.
Tuesday, January 28, 2020. The Central Bank of the Argentine Republic agreed with the Ministry of Territorial Development and Habitat of the Argentine Nation to implement a compensation mechanism to cushion the increase that UVA mortgage debtors would have to face in February.
The end of the freeze established as of August 2019 by the previous government would imply a 26 percent increase in quotas.
In order to avoid such a pronounced increase, a bonus scheme will be implemented that will distribute over a period of 12 months the increase that should have been imputed as of February.
To guarantee this convergence process and in line with the criterion of shared effort established in the Law of Social Solidarity and Productive Reactivation, financial institutions will contribute a total of $1,411 million during the term of the same.
Example of the convergence scheme of quotas:
– Considering a loan with an installment of $ 12,000, the 26 percent increase foreseen would imply a jump in it to the $ 15,100 established by the contractual quota for February 2020. Within the framework of the convergence mechanism, the quota will be increased to $12,600 (+5%).
– If the maximum credit accessed by the beneficiaries of the freeze is considered, the installment should go from $24,300 in January to $30,700 in February (+26%). With the convergence mechanism, the amount to be paid in February will be $25,700 (+6%).
It was also decided that in the event that the installment to be paid exceeds 35% of the family income credited by the debtors, financial institutions must establish a scheme that promptly attends to these cases.
As a result of the credit policies implemented by the previous government, the weight of UVA mortgage loans fell, for the most part, on public banks. The cost of the freeze ($690 million from September 2019 to January 2020) was financed using funds from the PROCREAR trust, an instrument originally designed to build homes.
According to the survey carried out by the Central Bank of the Argentine Republic, there are currently a total of 105,000 UVA mortgage debtors, of which 95,000 correspond to loans of up to 120,000 UVAS and for single homes.
