More than 30,000 New Mortgages Hang in the Balance, Whilst the Repayments of the most Vulnerable are Suspended

The effects of the coronavirus are also impacting the sale and purchase of homes and the signing of mortgages, at least in March and April. More than 30,000 home loans are in danger, if we look back at the number signed in March 2019 by way of reference. Specifically, 30,176 mortgage contracts, according to data from INE. Meanwhile, the Government is already beginning to take measures in relation to the real estate sector: on Tuesday, it agreed to postpone the mortgage repayments of those people in situations of economic vulnerability affected by the coronavirus crisis.

This is a measure that banks already expected. They have also asked for the provisions required by law to be relaxed. Why? Because based on the current banking regulations in Europe, a moratorium on the payment of mortgage repayments would force the affected loans to be reclassified as doubtful, known as NPLs (Non-Performing Loans), which would trigger the obligation for the banks to dispose of them through portfolio sales to avoid being penalised.

 

 

Original Story:

Translation/Summary: Carmel Drake

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