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Gov’t decides on guarantees for out-of-work Hungarians repaying home loans - extended

  The government agreed at a cabinet meeting on Wednesday on a plan to temporarily assist, with guarantees, Hungarians who have lost their jobs because of the economic crisis and are having trouble repaying their home loans, government spokesman Dávid Daróczi said.

The state would stand ready to provide a guarantee, up to two years, on reduced installments of clients who ask their banks to ease repayment conditions. The cabinet will start presenting the proposal to bank representatives so a decision on the matter can be made next week. Details of the construction will be worked out by next Wednesday.

As it stands now, none of the details of the proposal is public. It is not known whether the guarantees will come directly from the state or through a company. Daróczi said that the construction would apply to loans taken out before September 1, 2008, according to plan.

To assist Hungarians with foreign currency-denominated loans, the government wants to extend an agreement with banks on waiving charges for clients to change their loans for homes or cars to forint constructions, Daróczi said. The issue will be discussed by the government next week, he added.

About 60% of lending stock in Hungary is denominated in foreign currency, of which the retail home loan stock alone comes to more than HUF 2,200 billion, or 9% of GDP. (MTI-Econews)