Acquisition of Real Estate Finance Assets or Rights Arising from Mortgage Finance Companies
| No: 381000061976 | Date(g): 7/3/2017 | Date(h): 9/6/1438 |
Translated Document
Effective from 2017-03-07 - Mar 06 2017
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Referring to SAMA Circular No. 381000039082 dated 10/04/1438 H regarding the increase of the maximum LTV on real estate finance granted by banks and exchangers to citizens to own their first home, and SAMA Circular No. 371000064719 dated 07/06/1437 H regarding the acquisition of financing assets from real estate financing companies or the rights arising from those assets, and given that some banks are contracting with real estate financing companies to acquire mortgage financing assets or the rights arising from those assets.
It should be noted that there is nothing preventing a bank from acquiring mortgage financing assets or rights arising from such assets in cases of disposal without recourse or with partial recourse in contracts for the first home financing for citizens, provided that the amount of the existing financing for the assets (or the rights arising from them) upon acquisition does not exceed (85%) of the value of the home. It is also emphasized that compliance with Circular No. 371000064719 dated 07/06/1437 H must continue when acquiring mortgage financing assets or rights arising from them for financing contracts other than for citizens’ first homes.
Please take note and adhere accordingly.