Hungarians that cannot afford the repayments on their homes can sell their properties and move into a cheaper home, but only if they get a good price for their existing home, said Gyuris, who is deputy-CEO of Hungary’s biggest commercial lender, OTP Bank. The state could support this endeavor with a 2- to 3-percentage-point interest subsidy for loans taken out by private individuals to buy the homes of troubled borrowers, he added.
Another possibility discussed at talks between representatives of banks and the state is the establishment of an exchange rate band for borrowers with loans denominated in Swiss francs, once the most popular retail lending products in Hungary, Gyuris said. Borrowers’ installments would be capped if the forint slips past the weak end of the band, but a lower limit for installments would also be set if the forint fir past the strong end of the band. Bigger repayments when the forint is strong could offset smaller ones when the forint is weak, he explained. If this is not the case, the government could provide guarantees on the difference, which borrowers would still have to pay, he added.
Hungary’s previous government introduced a moratorium on foreclosures last winter and extended it until April 15, 2010. The current government extended the moratorium first until December 31, then until April 15, 2011. Ending the moratorium could affect more than 100,000 properties.
Non-performing loans — those more than 90 days overdue — made up 9.3% of Hungarian banks’ gross retail lending stock at the end of 2010, Econews reported earlier.
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