BUDAPEST May 12 Hungarian lawmakers could make
a foreclosure ban on foreign currency mortgages indefinite as
soon as Monday, a senior ruling party lawmaker said, the latest
step in protracted legal manoeuvring to get rid of the toxic
Foreign currency loans, mainly in the safe-haven Swiss
franc, were popular in the indebted central European country of
10 million people before the global crisis for the low interest
rates they offered.
But the loans turned sour after a lending bubble burst and
the forint tumbled, pushing up repayments and many into default.
"Parliament could decide as soon as today (in a fast-track
procedure) to make the foreclosure moratorium on foreign
currency mortgages indefinite," ruling Fidesz party lawmaker
Gergely Gulyas told a news conference.
"There will not be any foreclosures until parliament comes
up with a definitive solution to the foreign currency loan
problem," he said.
Prime Minister Viktor Orban's Fidesz party has promised a
comprehensive relief package for foreign currency mortgage
holders but the plans have been delayed for months due to the
slow progress of various court proceedings.
Hungary is waiting for a Supreme Court ruling on some
aspects of the mortgages, such as unilateral interest rate hikes
and the so-called exchange rate spread applied in the loans.
Gulyas said these factors accounted for nearly half of the
rise in repayments from pre-crisis levels but declined to give
details about the planned relief package, pointing to the need
for a relevant court ruling to be made.
The Hungarian court could make this decision later this
year. Gulyas said once this happened, lawmakers could pass the
new relief package "within weeks."
Orban, re-elected for another four years in a landslide last
month, has already passed a number of schemes to help hundreds
of thousands of families saddled with such loans. One such
scheme cost banks about a billion euros.
Hungarian banks are largely foreign-owned. They include
units of Belgium's KBC, Austria's Raiffeisen Bank
, Erste Bank and Italy's UniCredit.
Gulyas said the step could also make the banks more keen to
come up with a permanent fix for the problem. The Hungarian
Banking Association could not comment immediately.
(Reporting by Gergely Szakacs)