Mortgage in Russia
Mortgage is made on the security of real estate, mainly land, with the aim to get a loan, the so called mortgage credit. Mortgage also serves to describe funds, which one gets for mortgaged real estate, or mortgage credit debt.
Debtor-creditor relationship in the market economy acquires an absolutely different meaning in comparison to the analogous one existing in the command-administrative system. There appears a necessity to guarantee civil relationship stability. One of the most significant legal regulation instruments is the assets system, which secures fulfillment of the debtor’s obligations. Mortgage crediting in its turn is considered by the government to be a mechanism, which can solve issues of a great social importance within a given country: housing, capital construction financing, etc. For the period of 70 years mortgage had not been reflected in Russian Civil Law science. The legislation excluded the possibility to collect a penalty on the real estate. Only with passing the law on mortgage there appeared a legal mechanism which allows to use mortgage as an important institution securing creditor’s rights. Owing to this legislative act, the mortgage institution, which is the most effective security means for contract terms, started to regenerate. In accordance with the contemporary legislation the main mortgage function is motivating the debtor to fulfill his obligations as well as preventing or reducing the negative consequences of not fulfilling them.
Mortgage loan was not accepted in Russia for a long time, and that is why it is not widely used today in economical activities, though mortgage crediting seems to be the only possible option for the majority of the Russian people to solve the housing problem.