Are you sure?

Job problems main reason for mortgage woes, says banking association head

While 8% to 10% of clients are facing financial troubles, over 90% have kept up with mortgage payments so far, Levente Kovács, Secretary General of the Hungarian Banking Association, stressed in a Wednesday morning statement on public television, reported Portfolio.hu

"In our experience, which may come as a surprise to many, the 8% to 10% of clients experiencing real financial problems are citing difficulties owing to job loss rather than as a result of currency rate fluctuation," Kovács said.

"Therefore, we should find a solution for people who have lost their jobs and are unable to keep up with payments." Those with a forint-denominated mortgage are facing the same issue [of job loss], Kovács added. 

He reminded that Hungary had a ban on repossessions during the past two years, which was lifted only recently. The new rules have allowed only 146 repossessions to commence in the first three months after the ban was lifted.

"It is in the banking sector's best interest to keep borrowers within the system. When a mortgage becomes a non-performing loan, the client is the number one loser, followed immediately by the bank as a close second as today's real estate prices make it impossible to sell the property at a profit," Kovács explained