“Yes, I was one of those who took a currency loan”, says the forty year old father of two. “Twenty million that are now sixty. I am not asking that my loans be remitted. But when I went to the bank to look for solutions, they said no because I am one payment behind. Well that is exactly why I came to the bank in the first place”.
“I am forty years old and I have nothing. All my life has been about catching up with inflation and interest rates. I took the currency loan because the low interests were more favorable in the long term compared to almost 20% interests on the ISK. I expected fluctuations but not a systematic crash.”
Finance Minister Gylfi Magnusson and PM Johanna Sigurdardottir maintain that enough has been done to help homeowners. But people in Iceland were shocked this week to find out that those who get assistance by extending their loans etc. must suffer the ignomity of having their names published in Logbirtingarbladid, where bakruptcy-cases are traditionally published amongst other actions. “Smells like the Soviet”, says Petur Blondal, Independence Party MP.
Meanwhile the first Icelandic Viking Raider has been declared bankrupt. Magnus Thorsteinsson has no worries though. He had the foresight to move his home to Russia last autumn where Icelandic bankruptcy cases cannot be sought. Magnus should feel right at home in Russia where he operated the Bravo drink-productions with Bjorgolfur Gudmundsson and Bjorgolfur Thor before selling it to Heineken and coming home to receive Landsbankinn from the Independence Party on the cheap. Magnus has been an active investor in different sectors but it was Straumur Bank that requested the bankruptcy order because of loans that he was personally responsible for.
Magnus says that Straumur has shown “unusally strong-armed tactics” in collecting the debt. Funny how the businessmen that ran Iceland into the ground are suddenly so much like the rest of us.
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Vilhjalm
2 years ago
I see that the anger of homeowners is building and that there is going a demo tomorrow.
It is unfortunate that no one seems to know what they are demonstrating for. You can see what they are against — the terrible burden of paying off overinflated mortgages combined with indexing.
They want the government to do something, preferably against the banks, who they feel deceived them over the terms of the loans.
But now that the banks are essentially owned by the government, ie the people, what do they expect the government to do? And especially when the government needs the mortgage payments for income and when issuing write-offs of debt means issuing money to the foreign creditors?
Somebody should tell the demonstrators what they want: removal of indexing, systematic mortgage reform (such as the Zingales plan), ch 11 and ch 13 “pre-bankruptcy” debt reorganization and court-supervised mortgage cramdowns. Most of the “loss” would fall on the heads of the foreign creditors, who would either get the new 50/50 future appreciation mortgages or, if they end up owning Icelandic mortgages, would get a 50% or so haircut.
Instead, popular discussion has descended into a battle between the new homeowners and old homeowners, who think that since they have no re-payment problems the new homeowner generation would be getting an unfair advantage at the older generation’s expense.
Pretty sad, really.