In an exclusive statement to *Al-Youm*, Talaat Hafez, the official spokesperson for Saudi banks, urged everyone not to rush to judgment on the regulations before they are implemented and tested, refusing to place the responsibility for resolving the housing crisis on any specific entity. He noted that the system will be implemented on schedule and will initially undergo a trial period, during which it will become clear to everyone that the regulations will benefit all segments of society\u2014whether high-income, low-income, or those with limited income. It is well known that housing units vary in size from oneunit to another, and there are variations in the prices of these units. Housing products of different sizes will be available to everyone based on their creditworthiness and credit history. From a personal perspective, I believe that one of the goals of these programs is to encourage a culture of saving among citizens so they can set aside a portion of the home\u2019s value\u2014an investment that increases in value year after year. Some say that these programs are aimed at specific income brackets, but this is not true because housing units vary in price according to the financial capacity of the person who wants to buy a home, and it is not true that they target or exclude any particular group.<\/p>\n
There are also rumors about the low-income group that are untrue, and this specific group has special programs; we cannot hold one entity responsible over another for their lack of home ownership. I believe that the combined efforts of various financing entities\u2014whether banks or financing companies that have obtained licenses to provide financing\u2014along with the efforts of the state,represented by the Ministry of Housing, the construction of housing complexes, and the Real Estate Development Fund\u2014all these efforts are moving in the same direction: enabling citizens to own a home.<\/p>\n
Regarding reports that banks are set to double their contributions to corporate social responsibility programs through certain initiatives they are currently developing and plan to implement in 2015. .<\/p>\n
Hafiz said: \u201cPerhaps everyone has heard or read about a recent initiative by one of the Saudi banks to proceed with the construction of 500 housing units over the next few years as part of its corporate social responsibility and other social initiatives, As is well known, all Saudi banks have signed an agreement with the Real Estate Development Fund regarding the supplementary financing program available to borrowers from the Fund, and approval has been granted for borrowers to approach any of these banks to obtain a loan of a similar amount, or more or less, depending on their creditworthiness and credit history, thereby enabling them to purchase a suitable home. As is well known, land prices\u2014which account for approximately 60% of a home\u2019s value\u2014have risen. During the roughly two-month period since this system was implemented, a trial period involving four banks during which 400 mortgage loans were financed\u2014imagine what will happen when all banks that have signed agreements with the Real Estate Bank begin implementing the program. Furthermore, the activation of the mortgage system and the enforcement judiciary\u2014all these programs combined\u2014will require only a short time, not a long one, before theyyield positive results, God willing, and help our esteemed citizens secure suitable housing.<\/p>\n
Cabinet Decision No. 259, dated 12\/8\/1433 AH, granted companies subject to the Real Estate Financing System and the Financing Companies Supervision System a two-year grace period starting from the effective date of the two systems, as stipulated in Article 36 of the Regulation on the Supervision of Finance Companies, requiring companies and institutions operating in the Kingdom that were engaged in financing activities prior to the entry into force of the regulation to bring their affairs into compliance with the provisions of the new regulation and to develop products in a manner that does not conflict with the provisions of Islamic Sharia, as provided for in Article 3 of the Real Estate Financing System and as determined by the Sharia committees specified in Article 3 of the Regulation on the Supervision of Finance Companies, and in a manner that does not prejudice transparency, fairness in transactions, and the soundness of the financial system.<\/p>\n
The deadline is Saturday, November 8,2014. The new mortgage financing regulations will reduce the financing amount per residential unit from 90% to 70% of the total value of the home, meaning the borrower will be required to pay 30% as a down payment. Article 12 of the mortgage contract, as set forth in the Executive Regulations of the Mortgage Financing System, Section on Definitions and General Provisions, Chapter II, stipulates that ((A mortgage lender may not grant credit in any form of financing exceeding (70%) of the value of the residence covered by the mortgage contract, and the Authority may change this percentage in accordance with prevailing market conditions.))<\/p>\n
Work had begun on the mortgage financing system, the lease financing system, and the system for the supervision of finance companies, ninety days after their publication in the Official Gazette \u00abUmm al-Qura Gazette,\u00bb Issue No. (4425), dated 13\/10\/1433 AH. Accordingly, the above regulations came into effect at the beginning of this year on 16\/1\/1434 AH, and the Executive Regulations for the Financial Leasing System and the Executive Regulations for the Supervision of Finance Companies came into effect as of 9\/6\/1434 AH, the date of their publication in the Official Gazette. It should be noted that the Executive Regulations for the Real Estate Financing System came into effect on 7\/7\/1434 AH. .<\/p>\n
Article 82 of Chapter XVIII, \u201cProtection of Consumer Rights in Financing Services,\u201d of the Executive Regulations of the Financing Companies Control Law (( requires financing companies to use the decreasing balance method to allocate the cost of the term over the maturity period, such that the cost of financing is allocated proportionally among the installments based on the outstanding balance of the financing amount at the beginning of the period for which the installment is due, and that this be included in the financing contract.))<\/p>\n
Article 83 specifies the rates of fees, commissions, and administrative service charges that the finance company may collect from the beneficiary ((Such fees, commissions, and administrative service costs shall not exceed the equivalent of (1%) of the financing amount or (5,000) five thousand riyals, whichever is less.))<\/p>\n
Article 86, paragraph 3(a), prohibits ((A finance company is prohibited from making an advertisement that contains a false offer, statement, or claim, or that is worded in a manner that could, directly or indirectly, deceive or mislead the consumer<\/p>","protected":false},"excerpt":{"rendered":"
Reading time: <\/span> 3<\/span> Minutes<\/span><\/span>Talaat Hafez, spokesman for Saudi banks, called on everyone not to rush to judge the systems before they are applied and tried, refusing to hold a specific party responsible for solving the housing crisis, pointing out that the system will be applied on time and will initially be subjected to a trial period, through which it will be clear to everyone that the systems will benefit all segments, whether those with ... Read more<\/a><\/p>","protected":false},"author":34,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"0","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"","_seopress_redirections_param":"","_seopress_redirections_type":0,"_seopress_analysis_target_kw":"","_seopress_news_disabled":"","_seopress_video_disabled":"","_seopress_video":[],"_seopress_pro_schemas_manual":[],"_seopress_pro_rich_snippets_disable_all":"","_seopress_pro_rich_snippets_disable":[],"_seopress_pro_schemas":[],"footnotes":""},"categories":[119],"tags":[],"class_list":["post-2146","post","type-post","status-publish","format-standard","hentry","category-real-estate-finance"],"acf":{"amlak_post_excerpt":"","amlak_post_excerpt_source":{"label":"Amlak post excerpt","type":"text","formatted_value":""}},"featured_image_urls":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","trp-custom-language-flag":"","event-thumbnail":"","event-medium":"","event-large":"","event-hero":""},"author_info":{"info":["\u0627\u0645\u0644\u0627\u0643 \u0627\u0644\u0639\u0642\u0627\u0631\u064a\u0629"]},"category_info":"\u062a\u0645\u0648\u064a\u0644 \u0639\u0642\u0627\u0631\u064a<\/a>","tag_info":"\u062a\u0645\u0648\u064a\u0644 \u0639\u0642\u0627\u0631\u064a","comment_count":"0","_links":{"self":[{"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/posts\/2146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/comments?post=2146"}],"version-history":[{"count":0,"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/posts\/2146\/revisions"}],"wp:attachment":[{"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/media?parent=2146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/categories?post=2146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amlak.net.sa\/en\/wp-json\/wp\/v2\/tags?post=2146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}