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Abstract
AIM: This article examined the factors that contributed to the accumulation of overdue mortgage loans repayments for the period of 2007-2017 in the Russian Federation. The article discusses the complex nature of issue, its impact on the Russian economy and lesson learned to prevent Russian economy to withstand such crisis in the future. The factors include, mortgage bonds volume, home ownership rate, mortgage loan interest rate and mortgage loan approved. METHODS: The data for this study was obtained from statistical books of Russian Central Bank and Federal State Statistic Service. The analysis was performed using mixed method involving qualitative and quantitative procedures. Multiple regression analysis assessed the magnitude of effect of each of the factors on unpaid mortgage loan. RESULTS: The study found that both mortgage interest rate and mortgage loan amount have a large positive effect on overdue debt. Mortgage Subprime loan amount has no adverse effect on overdue mortgage loan payment. Mortgage Subprime loan amount did not behave as expected in that showed high subprime amount having a large low effect on overdue mortgage loan payment, and therefore hypothesis 3 is not confirmed. Homeownership amount has small effect on overdue mortgage loan payment amount. Hence, hypothesis 4 is not confirmed. CONCLUSION AND RECOMMENDATIONS: The impact of the high interest rate and uncontrolled amount of the mortgage loans on Russia’s economy was impressive. The growth of the overdue debt resulted in social and economic problems. Conclusions are that the Central Bank and the government should pay more attention to the regulation of the interest rate and to control the amount of the mortgage loans.