On the recognition of the Commission's protocol decision on the refinancing of a housing mortgage loan as illegal

No. 6001-23-00-6ap/1432 dated 11/14/2023

Plaintiff: Subsidiary of JSC (hereinafter referred to as JSC) "Bank"

The defendants:         Akimat of the city,      The Review Commission

complaints from borrowers who have been refused refinancing of residential mortgage loans (mortgages) at the Mayor's Office of the city

The subject of the dispute: on the recognition of the commission's protocol decision of September 29, 2022 on the refinancing of a residential mortgage loan as illegal

Review of the defendant's cassation complaint PLOT:

On June 27, 2014, the Bank JSC (hereinafter referred to as the Bank) and S.B. (borrower, interested party) signed a bank loan agreement for the purchase of housing in the form of apartment No. 1 (mortgage).

The mortgage housing loan was issued in the national currency tenge. The pledge agreement was registered on February 19, 2013.

On September 6, 2022, S.B. applied to the Bank for full debt cancellation under the bank loan agreement under the State Housing Loan Refinancing Program (Mortgage Loans), approved by Resolution No. 69 of the Board of the National Bank of the Republic of Kazakhstan dated April 24, 2015 (hereinafter referred to as the Program).

On September 12, 2022, the Bank refused to write off the debt to the borrower by letter, citing inconsistencies in the interests of the bank.

On September 16, 2022, S.B. repeatedly applied to the Bank for refinancing the loan under the Program, referring to his status, according to which he is classified among the socially vulnerable segments of the population as a large family (hereinafter referred to as the SSC).

The Bank also rejected the borrower's repeated application.

On September 28, 2022, S.B. applied to the Commission for Reviewing Complaints from Borrowers who were refused refinancing of a residential mortgage/mortgage loan under the Mayor's Office of the city (hereinafter referred to as the Commission) with an application for refinancing a mortgage loan.

On September 29, 2022, the Commission satisfied the borrower's application with the disputed protocol decision, and made a binding decision on the refinancing of the loan to S.B.

The basis is the status of a large family belonging to socially vulnerable segments of the population (SSN).

The Bank is not a participant in the Program and, accordingly, does not have the means to implement the commission's decision under the Program by reimbursing the difference in remuneration (from 12 percent to 3 percent).

At the same time, S.B.'s mortgage loan is not classified by the Bank as problematic.

On October 4, 2022, the Bank received a letter from the City's Housing and Housing Inspectorate (hereinafter referred to as the Department, the working body of the Commission) with an attached extract from the minutes of the Commission meeting, which resulted in a positive decision to refinance the borrower's loan.

The Bank has applied for clarification to the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (hereinafter referred to as the Agency).

By letter dated November 11, 2022, the Agency informed the Bank that appropriate financing should be allocated to refinance the loan to S.B., while confirming that the Bank was not included in the list of second-tier banks participating in the Program.

The Bank, considering the protocol decision to satisfy the borrower's complaint and refinance his loan to be illegal, filed a challenge claim.

Judicial acts:

1st instance: the claim is satisfied: the protocol decision of the Commission for Reviewing Complaints of borrowers who received refusals to refinance a housing mortgage/mortgage loan under the Mayor's Office of the city dated September 29, 2022 regarding the refinancing of the loan of S.B. was declared illegal and canceled.

Appeal: the court's decision remains unchanged.

Cassation: judicial acts are upheld.

Conclusions: According to the terms of the state program for refinancing housing loans (mortgage loans), approved by Resolution No. 69 of the Board of the National Bank of the Republic of Kazakhstan dated April 24, 2015 (hereinafter referred to as the Program), a mortgage housing loan (mortgage loan, in tenge) received by the borrower from the bank in the period from January 1, 2004 to December 31, 2015 is subject to refinancing. December 2009.

Refinancing decision/The refusal to refinance is accepted directly by the lender (participant of the Program).

In case of refusal to refinance the loan, the borrower has the right to apply to the Commission established under the Mayor's Office of the city in accordance with Resolution No. 182-1404 dated May 12, 2022.

The Commission operates on the basis of the Regulations on the Commission, approved by the City Akimat Resolution No. 182- 1404 dated May 12, 2022.

The Commission is an independent, independent body and makes decisions by a simple majority vote of its members and chairman.

By virtue of subparagraph 13) of paragraph 4 of the Program, the Commission's decision on refinancing a residential mortgage loan is subject to execution by the bank.

The dwelling must be the only one for the borrower and his spouse in the territory of the Republic of Kazakhstan as of January 1, 2015.

According to the provisions of Articles 7, 79 of the CPC, an administrative body carries out administrative procedures within its competence and in accordance with the Constitution, this Code and other regulatory legal acts of the Republic of Kazakhstan. The administrative act must be lawful and justified.

By virtue of part 4 of Article 84 of the CPC, an illegal burdensome administrative act is subject to mandatory cancellation.

The court of first instance, guided by the above-mentioned norms of the Code and the provisions of the Rules, reasonably satisfied the claim to Bank B JSC, recognizing it illegal, canceled the protocol decision of the Commission for Reviewing Complaints from borrowers who received refusals to refinance a housing mortgage/mortgage loan under the Mayor's Office of the city dated September 29, 2022 regarding the refinancing of the loan to S.B., since It has been reliably established that the plaintiff (the Bank) is not a participant in the state program for refinancing housing loans (mortgage loans), approved by Resolution No. 69 of the Board of the National Bank of the Republic of Kazakhstan dated April 24, 2015. Consequently, the plaintiff does not have a source of financing, that is, reimbursement by the state to the Bank of funds related to the refinancing of the loan, which would have been provided for if the Bank had participated in the state program.

In addition, S.B., who belongs to socially vulnerable segments of the population (with the status of a large family), as of January 1, 2015, has no overdue debts of more than 90 days, his loan is not recognized as problematic, and he received it in 2014, that is, during the period not included in the Program.

In view of the above circumstances, the court of first instance came to a reasonable conclusion that the Commission, in making the contested decision to refinance the loan to S.B., which did not meet the terms of the Program, actually exceeded the limits of administrative discretion, which led to the mandatory execution by the Bank of the contested Commission decision, which in fact is not a favorable administrative act in relation to the plaintiff.

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