Article 34-1. Features of a mortgage loan of an individual not related to entrepreneurial activity of the Law on Banks and Banking Activities in the Republic of Kazakhstan

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1. Prior to concluding a mortgage loan agreement with an individual not related to entrepreneurial activity, a bank or an organization engaged in certain types of banking operations must carry out a comprehensive, complete and qualitative assessment of the borrower's creditworthiness (solvency) in accordance with the internal rules of the bank or organization engaged in certain types of banking operations (hereinafter referred to as a proper assessment of creditworthiness the borrower).

For the purposes of this article, the appropriate assessment of the borrower's creditworthiness is the activities of a bank, an organization engaged in certain types of banking operations, by definition:

1) the possibility of fulfillment of obligations by the borrower under the mortgage loan agreement of an individual who is not related to entrepreneurial activity, confirmed by one of the following documents at the discretion of the bank, the organization performing certain types of banking operations:

an extract of the unified accumulative pension fund from an individual pension account for the last six months;

a certificate of income from the place of work for the last six months;

the individual income tax return of the individual borrower for the last tax period;

other documents reflecting the possibility of fulfilling the obligations of the borrower under the mortgage loan agreement of an individual who is not related to entrepreneurial activity, in accordance with the internal documents and procedures of the bank, an organization engaged in certain types of banking operations.;

2) the presence or absence of the borrower's credit history for the last six months;

3) the presence or absence of arrears in taxes and other mandatory payments to the budget;

4) the presence or absence of debt reflected in the credit report to third parties.

A proper assessment of the borrower's creditworthiness, together with information on the borrower, takes into account information on an individual (co-borrower) acting under a mortgage loan agreement to an individual not associated with entrepreneurial activity, as jointly and severally responsible for fulfilling loan repayment obligations.

A bank or an organization engaged in certain types of banking operations is not responsible for providing the borrower (co-borrower) with false information for the bank or an organization engaged in certain types of banking operations to properly assess the borrower's creditworthiness, as provided for in this paragraph.

2. It is prohibited to provide mortgage loans not related to entrepreneurial activity in foreign currency to individuals who do not have income in this currency during the six consecutive months preceding the date of the individual's application.

3. A bank or an organization engaged in certain types of banking operations may not, under mortgage loan agreements of an individual not related to entrepreneurial activity, set and charge fees for maintaining a bank account related to the issuance and servicing of a mortgage loan, as well as for crediting a loan to a bank account.

4. If the terms of the mortgage housing loan agreement of an individual who is not related to entrepreneurial activity are changed or a new loan is issued in order to repay the mortgage housing loan, the capitalization (summation) of overdue remuneration, penalties (fines, penalties) to the amount of the principal debt is not allowed.

5. The borrower, who is an individual, is obliged to ensure the targeted use of a residential mortgage loan.

A bank or an organization engaged in certain types of banking operations shall monitor the targeted use of a mortgage housing loan of an individual in accordance with the procedure established by the mortgage housing loan agreement.

In case of misuse of a mortgage housing loan from an individual who is not related to entrepreneurial activity, the borrower is obliged to return the mortgage housing loan to the bank or organization engaged in certain types of banking operations ahead of schedule and pay remuneration in part of the used mortgage housing loan accrued under the mortgage housing loan agreement for the entire period of use of the subject of the mortgage housing loan.

6. The borrower shall inform the bank, an organization engaged in certain types of banking operations, of all changes related to the borrower's identity, within fifteen business days from the date of such changes.

Changes related to the borrower's identity include changing his place of residence, changing his last name, first name, patronymic (if it is indicated in the identity document), replacing identity documents, changing the contact information used to contact the borrower, and the method of communication.

A statement by a bank or an organization engaged in certain types of banking operations about not receiving information from the borrower about all changes related to his identity does not constitute a violation by the borrower of the requirements of this article if the borrower proves that the information was sent properly.

7. Excluded by the Law of the Republic of Kazakhstan dated 05/24/2021 No. 43-VII (effective from 10/01/2021). 8. Excluded by the Law of the Republic of Kazakhstan dated 05/24/2021 No. 43-VII (effective from 10/01/2021).

9. In order to prevent an increase in the debt of a borrower who is an individual, a bank or an organization engaged in certain types of banking operations is prohibited from demanding payment of remuneration, penalties (fines, penalties), as well as commissions and other payments related to the issuance and servicing of a loan accrued after one hundred and eighty consecutive calendar days of delay in fulfilling the repayment obligation. any of the payments for the amounts of the principal debt and (or) remuneration under the mortgage loan agreement of an individual who is not related to entrepreneurial activity.

10. The amount of the payment made by the borrower, if it is insufficient to fulfill the borrower's obligations under the mortgage loan agreement of an individual not related to entrepreneurial activity, repays the borrower's debt in the following order:

1) remuneration arrears;

2) outstanding fees and other payments related to the issuance and servicing of a mortgage loan;

3) a penalty (fine, fine) in the amount determined in accordance with paragraph 2 of Article 35 of this Law;

4) remuneration accrued for the current payment period;

5) commissions and other payments related to the issuance and servicing of a mortgage loan;

6) the costs of the bank, the organization performing certain types of banking operations, to obtain execution;

7) outstanding principal debt;

8) the amount of the principal debt for the current payment period.

11. In cases of transfer of a dwelling to the ownership of a bank, an organization engaged in certain types of banking operations, and (or) transfer of a dwelling according to an act and absence from the pledgor – an individual belonging to socially vulnerable segments of the population in accordance with the Law of the Republic of Kazakhstan "On Housing Relations", in the ownership of another dwelling, he has the right, within thirty calendar days from the date of transfer of the dwelling to the ownership of a bank, an organization engaged in certain types of banking operations, to apply to a bank, an organization engaged in certain types of banking operations, with an application for the transfer of such a dwelling to him, including with the condition of its purchase.

12. A bank or an organization engaged in certain types of banking operations, within fifteen calendar days after the date of receipt of the application provided for in paragraph 11 of this article, shall review it and inform the individual of one of the following decisions:

1) consent to conclude a property lease agreement for a dwelling with or without the condition of its purchase;

2) refusal to conclude a property lease agreement, indicating a reasoned justification for the reasons for such refusal on the grounds established by this Law.

13. A bank or an organization engaged in certain types of banking operations may refuse to conclude a property lease agreement upon application provided for in paragraph 11 of this Article in the following cases:

1) the applicant's submission of false information about belonging to the category of socially vulnerable segments of the population;

2) the applicant's inability to pay rent due to lack of sources of income;

3) bankruptcy of the applicant;

4) the applicant's ownership of housing.

14. In the case of a property lease agreement with the condition of foreclosure of the dwelling, the right of ownership of the dwelling is issued to the tenant after the tenant has made the last rent payment or full early repayment of the cost of the dwelling, as defined in the property lease agreement.

The property lease (lease) agreement is terminated if the lessee fails to fulfill his obligations under the property lease (lease) agreement for a period of more than ninety consecutive calendar days, while the bank or an organization engaged in certain types of banking operations is prohibited from charging and demanding a penalty (penalty fee) for overdue payments.

The Law of the Republic of Kazakhstan dated August 31, 1995 No. 2444.

President

Republic of Kazakhstan

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