Estonia, Financial Services, Latvia, Legislation, Loan, Real Estate

According to the Justice Minister, currently it is not likely that the abrupt fall of the real estate market that happened during the previous financial crisis would be repeated, since generally, the housing prices have risen at the same rate as incomes and the banks' share in financing housing transactions is significantly smaller than during the previous rapid growth of the real estate market. However, the state should ensure that banks give loans responsibly and consider the risks of the real estate market.

"In case of housing loan payment difficulties, there has to be the possibility to get free of the loan, handing over the real estate to the bank for this. Legally, implementing the so-called principle of the "keys back" for home loans, following the Latvian example, is quite possible," said Anvelt.

In drafting the law, for example, the obligation of offering options could be considered, i.e. the bank could be obliged to submit the so-called keys back option. The minister said that the exact solution to be chosen will be decided by the next parliament.