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Fidesz-KDNP announces package of proposals to help forex borrowers

Fidesz MPs have drawn up an eight-point proposal package to support borrowers struggling to repay their forex mortgages. They will submit the respective legislative amendments to parliament by the beginning of October, Fidesz economic spokesman Antal Rogan said .

Rogan said they will consult banks on the proposals, adding, however, that "we will take into account the banks' points of view, not their interests".

The proposals, announced at a meeting of the governing Fidesz-KDNP's parliamentary group on Thursday, include prohibiting banks from making unilateral changes to contracts to the disadvantage of clients, banning unjustified interest rate hikes, making the use of a currency mid-rates compulsory when computing instalments and obliging banks to offer clients the option of free early repayments.

Under a further proposal, banks should automatically grant a five-year loan maturity extension at the request of the client . Furthermore, banks would be prohibited to set a mortgage loan's value over the prevailing market value of the collateral, and would not be allowed to charge penalty interest rate or any extra fines in the case of default. The planned measures will not apply either to properties purchased for business purposes or second or third homes.

Experts note that some of the proposed measures have been included in a code of conduct signed by nearly all of Hungary's retail lenders, adding that banks may not abide by all of the rules as shown by the first investigations and fines by market watchdog PSZAF. The code of conduct, taking effect at the start of 2010, affects among others the management of problem loans, unilateral changes to contracts and bank fees. PSZAF may fine banks up to HUF 2 billion for the breach of the code. (MTI Econews)