Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 08MOSCOW1576, FEAR AND LOATHING IN THE RUSSIAN MORTGAGE MARKET

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08MOSCOW1576.
Reference ID Created Released Classification Origin
08MOSCOW1576 2008-06-04 06:17 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow
VZCZCXRO0623
RR RUEHLN RUEHVK RUEHYG
DE RUEHMO #1576/01 1560617
ZNR UUUUU ZZH
R 040617Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 8398
INFO RUEHLN/AMCONSUL ST PETERSBURG 4969
RUEHVK/AMCONSUL VLADIVOSTOK 2850
RUEHYG/AMCONSUL YEKATERINBURG 3193
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
UNCLAS SECTION 01 OF 02 MOSCOW 001576 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS 
 
E.O. 12958: N/A 
TAGS: ECON EIND PGOV RS SOCI
SUBJECT: FEAR AND LOATHING IN THE RUSSIAN MORTGAGE MARKET 
 
REF: A. MOSCOW 1536 
     B. MOSCOW 1501 
     C. MOSCOW 1450 
 
------- 
Summary 
------- 
 
1. (SBU) Continuing our series of cables on Russia's real 
estate sector, Econoffs met with Dmitri Galkin, Director of 
Mortgage Lending at BINBank, a leading retail lender. 
According to Galkin, although most Russians cannot yet afford 
mortgages, even those who can shy away from them out of fear 
of debt and financial naivet.  He expected demand for 
mortgages to rise in the near future as Russians became more 
sophisticated about financial services.  Without a 
corresponding increase in the supply of affordable housing, 
this could cause already rising prices to explode.  End 
summary. 
 
------------------------ 
Mortgages Under-Utilized 
------------------------ 
 
2. (SBU) Galkin told us that BINBank provides a wide range of 
corporate and retail banking services.  Last year BINBank was 
recognized for its transparency by Standard & Poor's and as 
"the most dynamic bank of the year" by well-known Russian 
business journal "Company" for its expansion into Russia's 
regions.  The bank increased its outlets from 64 to 125 and 
has plans to further increase the number to 150-200 this 
year. 
 
3. (SBU) Galkin said BINBank also doubled its retail loan 
portfolio last year, with mortgages increasing from 21 to 30 
percent of all retail loans.  Despite the larger role 
mortgages play in the bank's portfolio, he said mortgages 
remained drastically under-utilized.  Only 7-8 percent of all 
apartment purchases last year were made with the help of 
mortgages.  Galkin said 25 percent of Russians could afford a 
mortgage, either on their own or with the help of 
co-borrowers.  This means many more Russians can afford a 
mortgage than are taking one.  However, it also means that 75 
percent of Russians still can not. 
 
4. (SBU) Galkin profiled his typical mortgage client as 
follows: 
 
-- Marital status: 50 percent single, 30 percent married, and 
20 percent married with children 
-- Average income: USD 2,000 per month 
-- Average purchase: USD 160,000 for a 538 square foot, 
one-bedroom apartment in Moscow's suburbs 
-- Down payment: 30 percent 
-- Allowable debt-to-income ratio: 50 percent 
-- Mortgage term: 15 years (BINBank's maximum) at 12.5-14.5 
percent interest (USD and ruble denominated, respectively) 
-- Additional fees: application fee (USD 20), property 
evaluation (USD 150)500), commission (1 percent of the 
loan), personal mortgage consultant (USD 300), bank safe 
rental (USD 85), realtor fees (5-7 percent of the purchase 
price), and insurance. 
 
-------------------------- 
Fear and Financial Navet 
-------------------------- 
 
5. (U) Galkin said there are a number of obstacles in the 
housing sector that were to blame for the under-utilization 
of mortgages.  On the supply side, there is simply a lack of 
housing stock, especially affordable homes. (Ref. A, B) On 
the demand side, Galkin said the average homebuyer's fear and 
financial naivet prevented them from seeing a mortgage as a 
viable option. 
 
6. (U) Galkin said Russia's history with financial crises had 
caused a general distrust of the overall financial system. 
Russians not only needed time to regain this trust, but also 
to be educated -- or re-educated -- on the benefits financial 
services, and mortgages in particular, could provide. (Ref. C) 
 
7. (U) Galkin said this lack of understanding also explained 
a strange phenomenon in his bank's business.  Despite taking 
mortgages with a 20-year term on average, most of BINBank's 
 
MOSCOW 00001576  002 OF 002 
 
 
clients paid off their loan well before the term because they 
were afraid of having debt.  Galkin also blamed financial 
navet for the fact that clients living in Russia's regions 
preferred to borrow in rubles just because they were more 
"comfortable" with local currency, even though the rate is 4 
percent higher than for borrowing in USD.  (Comment: The rate 
difference is probably even more, considering the ruble's 
fast appreciation. End Comment.) 
 
------------------------ 
Supply Response Critical 
------------------------ 
 
8. (U) Galkin predicted that over the next ten years, 
Russians would become more educated on financial services and 
more comfortable with the idea of taking on long-term debt. 
However, he noted that while this was good in principle, once 
the country's pent-up mortgage demand was unlocked, it would 
only widen the mismatch of supply and demand for affordable 
housing.  The lack of housing stock would be amplified and 
prices would soar even higher.  Galkin warned that the 
picture would be grim if the government did not adopt 
concentrated measures to increase the housing supply. 
RUSSELL