Channel 2 reports on a family of six in Hafnarfjordur that is considering leaving the country after their household debts rose at lightspeed up to 154 million ISK, if the government doesn’t provide solutions soon.
The banks that lent us the money destroyed the Icelandic economy and now they want to bankrupt us and take the property”, says the father in an email to Channel 2. The couple has six children, the two oldest have left home and the youngest is less than a year old. They are both college-educated and borrowed 26 million ISK in a currency loan for their town house which was valued at 48 million ISK at the time. When the wife got pregnant they decided to build a bigger house and started work on it in 2007.
In order to finance the new house they took two currency loans for 45 million ISK altogether. The decision to borrow in a foreign currency was not taken on a whim according to the couple, but after careful consideration. They looked at the ISK thirteen years backwards then estimated fluctuations between 25-30% and considered that within their means.
What they didn’t budget for was the freezing of the housing market, which means they cannot sell their old town house, and currency fluctuations of 100% since they borrowed the money. Today they owe 154 million ISK in home loans and have two houses they cannot sell. The bank is foreclosing on the town house which will be sold on an auction in November.
“We were offed payment-adjustments which means that someone will be our “guardian”, and tells us what to have for dinner and when we can take our kids to the movies and then after five years we have an option of owing 110% on our property”, says the father.
“But remember we owned half of our house until the banks and the government destroyed the economy. Are we supposed to accept this? No and no again, then it is better to leave the country and be bankrupt immediately. In my opinion our home equity is being stolen from us, instead of us receiving help “.
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Bromley86
2 years ago
“We were offed payment-adjustments which means that someone will be our “guardian”, and tells us what to have for dinner and when we can take our kids to the movies”
I thought that was a great idea. (It might be common reposession practice, but this is the first that I’ve heard of it).
Of course, that was before I saw the bit about owing 110% in five years. That’s mental; it’s like a stick and a stick approach. What incentive would anyone have to take this agreement, whether they were staying in Iceland or not?
Or have I misunderstood something?