UVA mortgages: the Central Bank and public and private entities oppose the modification of the contracts

The situation of the debtors UVA mortgage loans claiming to alter the contractual conditions of the loans taken at the time for the purchase of the house was discussed again in plenary session of the Finance and Budget Committees and the Treasury of the Chamber of Deputies. The claim is supported, among others, by deputy Julio Cobos.

The problem itself is well demarcated. According to Central Bank data, there are assets 97,000 UVA mortgage loans Y delinquency is less than 2% of the totalas the current head of Banco Nación explained, Silvia Batakis. He made it clear that UVA delinquency in BNA is just 0.98%.

The refusal to give a global solution that means modify all UVA creditsand the advice to look for special solutions for each case, the consensus reached by the presentations of the representatives of the financial sector. This Thursday, in addition to Pesce and Batakis, representatives of the banks passed by for the commission Province of Buenos Aires, City of Buenos Aires and the three Chambers representing national and foreign public private banks.

Everyone pointed out that the default rate is very low and that it would be a irresponsibility alter contracts.

Pesce put the magnifying glass on the profile of UVA lenders, a loan method widely used by the middle class between 2016 and 2019.

The head of the BCRA said so 85% of UVA credit buyers are in the top two income deciles. And that 80% of the debtors are workers registered in the private sector. He then implied that, in a context of severe shortage and a significant housing deficit, especially for low-income sectors, it was not appropriate to seek a one-off solution for debtors belonging to the wealthiest sectors.

Gaston RossiDirector of city ​​bankacknowledged that the quota-to-income ratio could have increased because inflation has been growing faster than the average wage in recent years, but that it is still manageable. He said that in the case of a loan that started with a commission-to-income ratio of 25%, today that ratio would be about 32%. “The rent could be a bit higher, but we believe the debtor is paying for his house and not the rent”

In turn, Claudio CesarioABA holder e Alessandro Perez, CEO of ADEBA, they stressed to MEPs that the only thing the contractual changes would achieve would be to further reduce, if possible, mortgage credit. Pérez called for caution and stressed that only with stable rules of the game could the financial system capture the long-term funds needed to finance mortgage lines of credit. And he recalled that Argentina stands out for having an insignificant volume of credit for housing – less than 1% of GDP – compared to countries like Chile where this ratio reaches 25%.

As we can see, the bankers’ response was energetic, and totally contrary to the spirit of the bill of the deputy Julio Cobos, which days ago asked to keep the UVA loan installments frozen, instead of bringing them back to par with inflation.

Mendoza presented a draft declaration requesting that the Executive develop a “new convergence scheme” on a provisional basis in order to reduce the negative impact that the credit update has on debtors.

The UVA installments were frozen from March 2020, at the beginning of the pandemic, until February 2021. From then until July 2022, a convergence mechanism was applied, in which the debtor paid the corresponding inflation adjustment installment plus that “debt” accumulated in the previous 18 months. Today, fees adjust in line with inflation.