A comparative analysis of domestic and foreign experience of credit for land use

In the vast majority of countries in the world today it is allowed by law to use land as a collateral or a lien for the loan. The advantages of land as a collateral are due to its stable location, the trend of continuously rising prices; physically land as a laid object can be left in the possession and use of the mortgagor. Western Europe and the United States have long had a well-developed and legislatively regulated mortgage system, based on the precise methods of registration of real estate, as well as strict legal registration and termination of lien on real estate. So, according to the European Mortgage Federation the total value of credits on mortgage is 3.4 trillion euros, or 40% of all bank assets in Europe. In the United States the total amount of credit resources in agriculture only now is about 200 billion dollars. In the small Western European countries with agricultural orientation, such as Finland, Sweden, Belgium, the Netherlands, there were private and public mortgage banks. In Finland, five private mortgage banks provided mortgage secured by real estate. In Sweden, there were four mortgage banks specialising in crediting housing, agriculture, shipbuilding, and trading. In Belgium, special credit institutions, which formed the so-called State credit sector, gave long-term loans. In the Netherlands, agricultural credit institutions, organised on a cooperative basis, gave mortgage. In the United States, the model of a mortgage company is applied. The analysis of the development of the civil-legal institute of mortgage and approaches to mortgage lending in foreign systems shows that their main difference lies in the principles of the resource base and the respective mechanisms of long-term financial resources for mortgage lending. In Europe, mortgage historically evolved as a means of real estate turnover. In the United States it is a part of the stock market, or, broader, the financial one. The analysis of the regularities of the development of mortgage lending in Russia leads to the conclusion that: - mortgage lending at the present stage is going through a period of intense development, which is provided by priority attention to agriculture from the State, as well as by the development of new tools and methods of crediting; - the development of mortgage lending is on its way to strengthen the market mechanisms of land market and land relations regulation, with the State's priority in management; - the main task of the State regulation of mortgage lending is finding ways and forms of co-ordination of interests of the State, production, financial and trade structures, urban and rural population. The identified benefits of the Western agricultural credit system is a model for improving the existing system of lending, which, however, must be adapted to the specific conditions of our country.

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