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Hungarian lenders to start accepting requests for fixed rates on forex mortgages in late summer

Hungarian lenders will start accepting requests to fix rates on foreign currency-based mortgages in late summer at the earliest, National Economy Ministry deputy state secretary Roland Nátrán told MTI.

Legislation necessary for the National Asset Manager is expected to come into force in the middle of July, allowing it to start operating from October 1 at the latest, Nátrán said.

National Economy Minister György Matolcsy on Friday submitted to Parliament a package of legislation that aims to assist Hungarians with foreign currency-denominated mortgage loans. The bill fixes the exchange rates on repayments for borrowers and envisions a national asset manager that will buy properties of troubled borrowers and allow them to remain in their homes as renters.

Earlier, Matolcsy said "a few thousand" homes could be taken over by the assets manager in 2012.

Nátrán said the National Asset Manager was expected to spend about HUF 5 billion to buy some 2,000 homes at a discount this year. He noted that the average individual value of the properties would be HUF 7 million, thus their entire individual value would be at most about HUF 14 million.

As the cap on foreclosures rises, the asset manager will intervene in at most 12,000 cases in 2012, thus the burden to the central budget could be three or four times that in 2011, he said. A decision on this will have to be taken by the government and Parliament at next year's budget talks, he added.

Interest subsidies for troubled borrowers who decide to move into smaller homes are expected to cost the budget an annual HUF 1.5 billion.