Russian families who took out mortgages denominated in foreign currency could face eviction as many struggle to maintain hefty repayments. Ivor Bennett reports.
It began as a dream come true. But for Olga and her family, owning their own home has quickly become a nightmare. Although they live in Russia, their mortgage is in dollars. And they can no longer afford the repayments. (SOUNDBITE) (Russian) OLGA PANZHENSKAYA, FOREIGN-CURRENCY MORTGAGE HOLDER, SAYING: "Both my husband and I work, our salary is paid to us regularly but one should remember that the rate of the rouble collapsed two and a half times. Even in the most fantastic scenarios our profit will not increase by two and a half times." Foreign-currency mortgages used to be attractive With banks offering lower interest rates compared to rouble-based loans. But a fall in oil prices and crippling sanctions have sent the rouble into freefall. Effectively doubling the debt for people like Olga, who now faces the threat of eviction. Dmitry and his wife have been forced to abandon their plans to have children, working more instead. They say the bank told them they could convert their mortgage into roubles after a year. But without any written proof, their appeals go unanswered. (SOUNDBITE) (Russian) DMITRY TEPLYAKOV, FOREIGN-CURRENCY MORTGAGE HOLDER, SAYING: "It started happening after the new year. It does not respond to our letters. If it announces something it only does it verbally, so it is impossible to prove anything, not even in court if we decide to go there." Many are also blaming the government for not doing more to help. Even risking arrest at this unsanctioned protest in Moscow's Red Square. The central bank has advised lenders to convert all foreign-currency mortgages using a fixed exchange rate. But the banks are so far dragging their heels. Andrey Maltsev at Nordea bank says the one-size-fits-all approach would cost them too. (SOUNDBITE) (Russian) DEPUTY CHAIRMAN OF THE MANAGEMENT BOARD NORDEA BANK, ANDREY MALTSEV, SAYING: "If we fix the rate at 39, which the central bank recommendation suggests, we realise that it would mean losses of about 2.5 billion roubles, just pure loss. Of course, such a loss can only be at someone's expense - we cannot take a loss of this amount upon ourselves." The banks say they are trying to find a solution that would work for both parties. Including a temporary moratorium on payments. But for families like Olga's, it may prove too little, too late.