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. Last Updated: 07/27/2016

ING to Team Up With DeltaCredit

U.S. government-funded mortgage program DeltaCredit has signed a partnership with Dutch-based ING Bank Eurasia.

The partnership is DeltaCredit's 17th with a bank and its second with a Western bank operating in Russia, following a deal with Dutch-based ABN AMRO earlier this year.

James Cook, president of DeltaCredit, said Monday he hoped to sign up its third Western bank within the next 30 days.

"For these large banks, it makes sense for us to handle their mortgages for now," he said. "It's a way of getting involved in the business without the start-up costs and high overheads."

Michael Pernetti, head of general banking for ING in Moscow, said the bank offers services to leading multinationals in Russia, but declined to name them. Between 7,000 and 10,000 employees of ING's corporate clients are potential mortgage clients this year, and this number could grow up to 20,000 potential clients within two or three years, he said.

ING had been looking at options to expand the services available to its clients and DeltaCredit's mortgage program has a good reputation that could be introduced quickly, Pernetti said.

Cook said ING clients will be offered mortgages on terms that include a 20 percent down payment, a 10-year term, 15 percent interest rates and amounts of up to $150,000.

A new DeltaCredit service will be available to ING clients that allows employers to give selected employees an incentive by paying some of the interest on their loans, so that these employees pay perhaps only 11 percent or 12 percent, Cook said.

Should the employee and the employer part ways, the employee would be required to pay the full 15 percent, he said.

Chris King, director of business development at Colliers HIB, said every new bank that DeltaCredit signed up was a step forward in giving the possibility of home ownership to Russian citizens.

He said the State Duma has been trying to create a mortgage system for years, but DeltaCredit has actually gone ahead and offered mortgages.

Working through banks would give DeltaCredit reliable information about clients' incomes and reduce the risk of a loan default, King added.

DeltaCredit, the financial arm of The U.S. Russia Investment Fund, was set up in 1994 with $440 million in capital and a seed capital of $20 million.

Cook said DeltaCredit has approved a total of about $15 million in mortgages and that applications for another $40 million for 1,200 clients are going through the approval process.