Avetik Avetikyan, a resident of the village in Aknashen, in Armavir Marz, signed a 5 year mortgage contract with the “Arfin” Credit Agency at a 24% annual interest rate. Mr. Avetikyan took out a 3.3 million AMD loan to renovate his house and to start-up a business. He put his house up as collateral. The house had a 125.7 square meter exterior surface and an interior measuring 93.4 s.m.

There were also additional attached properties totaling 186.7 s.m. – a 34.3 s.m. garage, a 28 s.m. shower stall, a 66 s.m. storage cellar, a 10.3 s.m. pit for baking, a 12.4 chicken coop, a 4.8 boiler house Also put up for collateral was a .14 hectare of land. On November 2, 2007, all this property was appraised by “Tigris Ltd.” for 6.2 million AMD. According to the contract, the family was allowed to inhabit the house for the length of the contract. The parties to the contract drafted certain clauses that were to have destructive consequences for Mr. Avetikyan in the future. According to the contract, “Arfin” reserved the right to place a lien on the house and other property, without first going to the courts, if Mr. Avetikyan defaulted on the loan payments or didn’t perform his obligations on time. “Arfin” also had the right to directly sell the property put up for collateral to a third party or to auction it off via the “Adamand” commodity exchange or other licensed brokers. On October 17, 2007, Mr. Avetikyan received official documentation attesting to the fact that he had been bequeathed property from his mother and father. The family house in the village of Aknashen, for which he had received 50% shares from both parents, soon became part of the collateral. I asked for more time to pay but the agency refused “Let me start off by saying that my wife found out that I had taken out a loan only later on. My brother even had no clue. I opened up a bakery and wanted to make a further investment in the business but I incurred some losses and couldn’t operate the place. The crisis hit us bad. According to the loan contract, I took out 3.3 million but in actuality I only received 3 million. They kept the remaining 300,000 as a type of gratuity. I always made the payments on time and if I was ever late I always paid the interest and penalties. I paid off 1.4 million of the loan and was looking at a balance of 1.6 million. But now I can no longer make my payments. The monthly payments come to 95,000,” Mr. Avetikyan told “Hetq”. He was the only inheritor of the family house since he wanted to use it as collateral to take out another loan. Avetik says that on several occasions he phoned up “Arfin” Credit Manager Edik Nazaryan and tried to get him stretch out the payment schedule but was told that he had to pay the balance in one lump sum. “But I wasn’t able to pay the 95,000 every month. How could I be expected to pay it all in one shot? Nazaryan called me up in December and told me that my house no longer belonged to me. Two weeks later he called me up[ again and asked what I wanted to do. I replied that I’d make payment. After that, Edik would keep calling me and telling me to get out of the house and that the place was now his. A friend of mine, who owns a taxi service, said he would sell the company and purchase my land with the money, and that I should take that money and pay off the loan. On May 5, my friend and I went to Edik and told him of our plan. We asked that he give some more time to sell the cab company. Edik refused and told me that I’d have to vacate the house by May 10. So, me and the family bundled up our belongings and left on May 10. Edik had threatened to round up some of those thick-necked characters and have us removed by force. He said that no one could resist him. I didn’t have the money to hire a lawyer,” Mr. Avetikyan added. Credit agency sells family house for $15,500 The family took leave of their house in the middle of the night and was only able to take some clothes with them. They left the rest of their belongings with Karen Harutyunyan, a neighbor. We visited the village and spoke with Karen. He lamented the fact that the credit agency had bankrupted one of his neighbors and had seized their place. He told us that “Arfin” had sold Mr. Avetikyan’s house for $15,500. “Isn’t it enough that they sold his house for that price? They still have yet to return the money Avetik paid them. In essence, the credit company has made a profit several times over,” Karen said. Agnashen Mayor Misak Miskayan told us that the Avetikyan’s were well respected in the village. “Sadly, I can do nothing to help them. The amount owed is quite significant.” A resident from a neighboring village purchased Avetik’s house and renovations have already begun. Avetik says that he wasn’t informed about the sale of his house. “I warned Nazaryan that my wife and kids were officially registered as residents at the house. But he said that they had been automatically removed. I cannot understand how they could be automatically removed if they never gave their permission or signed any agreement,” added Avetik. He went to see Edik Nazaryan, executive director of the “Arfin” credit agency for some answers. He didn’t wish to meet with us, saying that he was extremely busy. He only told us by phone that the entire matter was totally above board. Thus, we weren’t able to ascertain what price the house was actually sold for. Mr. Avetikyan is now in need of legal assistance. He wants to make sure that the credit agency acted within the confines of the law. In any event, Mr. Avetikyan has no money for legal counsel and, if it comes to it, to take the matter to court.