Icelandic news translated into English

October 31, 2008

Many are forced to pay mortgages for two apartments

Filed under: families — newsfrettir @ 5:02 pm

Married mother of three has repeatedly looked to the bank Landsbanki to have her bonded house morgage frozen – latest after getting a notice to quit her job. The banks answers are clear: We cannot do a thing. Hundreds of families are in financial crisis because of the real estate market situation.

70% recession has been in the real estate market this year. So it can be assumed that large group of people have found themselves in the situation of having recently bought a new property – but not being able to sell the old one. Therefore they are paying two housing mortgages.

At the Housing Financing Fund there have been 300 requests to freeze loans because of problems selling the old properties. Applications for these actions are increasing by the day now. President of the Realestate brokers is guessing 2-3000 families could be in this situation already.

One of these families came to the news station today. The woman and her husband have a full job with 3 teenagers. They decided a year ago to get a larger house, buy a house for 60 million ISK, but ease the payments by renting out a part of the property.

They had no luck selling the old apartment. They got tennents that didnt pay the rent. The woman got a notice to quit her job this week. The inflation this year alone has raised the loan on the apartments well over 10 million ISK. The plans calculated at home in the living room a year ago – and promised good things, are now broken.

But the family didnt take a mortgage in foreign currencies and therefore cannot have any financial aid or loans frozen at the bank. The news room got a copy of the e-mail sent from one of the Landsbanki employees the woman received yesterday:

“Sorry to hear that you lost your job. But unfortunately the answer is the same as before we cannot do anything about these loans, freezing the loans is not an option.”

(News article by *noname*)
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