Foreign currency loans part of over 90 days debt should be forgiven

For those debtors with foreign currency debt over 90 days who enter the exchange rate barrier, the state will only guarantee a bank account guarantee if the banks release part of the debt, Fidesz’s group leader said in a press conference in Budapest on Tuesday.

Parliament had passed a bill to assist foreign currency debtors

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Antal Rogán then said that Parliament had passed a bill to assist foreign currency debtors, which would include a full eviction moratorium by April 30 and the full opening of the exchange rate barrier. For example, those who have more than 90 days of debt will be able to enter the exchange rate fixing.

In the latter case, accepting the Economic Committee’s amendment, the government parties consider it appropriate for the bank to waive a part of the debt for tax purposes in exchange for a State guarantee on a pool account. The debt is to be discharged so that the debt is less than 95 percent of the value of the property used to cover the loan, said Fidesz, who said it was absolutely realistic.

The exchange barrier and owes more than 90 days

The exchange barrier and owes more than 90 days

He explained that if he enters the exchange barrier and owes more than 90 days, he obviously has accumulated arrears, penalty interest, which will be credited to the bank account. Thus, the debtor begins to repay the portion of his original debt less the exchange rate, while the said overdue debt and default interest will be on the pool account.
The leader of the faction emphasized that the debtor starts to pay at a fixed rate a portion of his original debt reduced by about 25 percent.
Debt relief is not mandatory, “just a strong incentive” for financial institutions – said Antal Rogán.
On Tuesday, Parliament passed a Fidesz motion on Monday to help foreign currency borrowers with an exceptional urgency procedure.

The leader of the group added in the briefing

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That the possibility of opening the exchange rate will be in effect from next week.
Under the exchange rate swap, the Swiss franc can be repaid at 180 forints, the euro at 250 and the Japanese yen at 2.5, and the fixed rate can be used for up to five years or until the foreign currency loan expires. The amount resulting from the difference between the fixed and the current exchange rate is accumulated in a pool account.

The bank and the state take over the interest rate repayment above the fixed exchange rate, the client only having to repay the principal later. The amount accrued in the Savings Account is a forint-based loan whose interest rate may not exceed the three-month interbank borrowing offered rate (FX).

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