well-maintained; and
constitution and termination of RM,
including the required appraisals.
law and its ruling establishes that multi-
business and insurance companies, as
well as mortgage management companies,
are allowed to grant RM, according to
their applicable law. This also reinforces
the required borrower's right to be duly
informed and advised provided that these
companies are subject to SBS Resolution
3274-2017. However, it is still required to
define the mechanism to provide counsel to
consumers and determine the responsible
organization in charge of this work.
According to comparative law, and
setting aside the particularities of laws
from countries of common law or civil
aim, considering that this type of loan
is granted to elderly real estate property
owners to complement their retirement
incomes. RM has been criticized,
considering that the development of its
use mainly depends on economic aspects,
therefore, a well-defined legal framework
shall promote the use of RM. For instance,
in Spain it is required that the borrower
is at least 65 years old or disabled of
33 percent of the borrower's capability.
Another example is the Mexico regulation,
which establishes the minimum property
value to be considered as a base for the
granting of the credit, with the possibility
for heirs to mutually agree with the
financial entity a refinancing of the debt.
Let's consider the context in Peru:
(i) Peruvians may choose between ONP
(the state pension system) or AFP (the
private pension system) as a retirement
source of incomes; however, nowadays,
to cover their real living expenses and
AFP allows it proportionally to the amount
effectively contributed by the retired;
(ii) Peru has a growing real estate
secondary market. Taking that into
consideration, RM is a good, new financial
product for elderly people.
In conclusion, the legislation of the
RM as a new financial product in Peru
is a very positive initiative to benefit and
protect elderly people or disabled people
by providing them with a new funding
source to complement their incomes in
order to satisfy their financial and living
needs without having to sell their real
estate property. However, the promotion of
this financial product would be enhanced
insofar as the legal framework improves.