More Amendments To The Civil Code To Foster Lending

The Hungarian Parliament recently adopted a significant amendment package to the Civil Code. The main body of the amendment entered into force on 1 October 2016. This amendment reintroduced the independent mortgage (önálló zálogjog) which used to be part of the Hungarian secured transactions regime under the former Civil Code, and refines the rules of the security deposit (óvadék). The primary aim of the amendment was to correct the Civil Code's legislative and conceptual shortcomings, and to simplify the operation of Hungarian financial institutions, as well as to ensure compliance with the Capital Requirements Regulation (CRR).

Independent mortgage

As of 1 October 2016 the independent mortgage replaced the unsuccessful and unpopular separated mortgage (különvált zálogjog), which proved insufficient for the needs of mortgage banks. The amendment not only reinstated the rules of the independent mortgage from the former Civil Code, but also significantly developed