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State Aid for Mortgage Debts Backed by 11 Banks
Wednesday 02 December 2009 Zoom in | Print page
Bratislava, December 2 (TASR) - A group of 11 banks from the Slovak Banking Association (SBA) have signed up for the state assistance programme for people who have lost their jobs due to the global economic crisis and aren't able to pay their mortgages, it was announced on Wednesday.
The banks have completed negotiations with a specialised state body created for this purpose - the Slovak Consolidation Agency - and are to sign a contract with the Agency in the next few days.
The banks included in the programme are: Ceskoslovenska obchodna banka, CSOB stavebna sporitelna, Dexia banka Slovensko, OTP Banka Slovensko, Postova banka, Prva stavebna sporitelna, Slovenska sporitelna, Tatra banka, VOLKSBANK Slovensko, Vseobecna uverova banka and Wustenrot stavebna sporitelna.
The aid will be targeted at people who have lost or will lose their jobs after January 1, 2009 and don't have any assets to use to pay mortgages on permanent residences signed before December 31, 2008. The value of the mortgage mustn't exceed €83,000. According to the proposal, inclusion in the programme will be limited until the end of 2010. Apart from their obligations towards their banks, mortgage clients will be bound by an obligation to the Slovak Consolidation Agency, which will have to be reimbursed along with the rest of the mortgage in line with the commercial interest rate. The obligation to begin paying back the state aid will be postponed for 12 months. If the client isn't able to begin paying the money back after a maximum of 18 months, the bank will be allowed to take action to recover the outstanding debt.
The share of failed housing loans - defined as loans that have not been paid for more than three months due to higher unemployment - has been growing steadily. According to statistical data from the Slovak central bank (NBS), while the share of failed housing loans was 2.8 percent in 2Q09, it was approximately 3.2 percent in September.
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