Brussels, 15/07/2009 (Agence Europe) - On Monday 13 July, the European Commission authorised the Hungarian Mortgage Support Scheme which is aimed at helping homeowners affected by the current economic downturn. The social character of the aid and the non-discriminatory way it is provided were the keys to approval, the Commission said in a press release, issued on the same day. Under the scheme, the Hungarian state would guarantee “bridging loans” which cover part of the monthly instalments of the original mortgage loans for a period of up to two years. Competition Commissioner Neelie Kroes said: “In the midst of the current financial crisis, it is very important that help is provided not only to banks, but above all directly to households in difficulty”.
Under the measure, notified on 16 June 2009, the Hungarian state will guarantee repayment of up to 80% of the bridging loans, granted to homeowners in danger of not being able to make their mortgage payments after, for example, losing their job. This guarantee is of advantage to both borrowers and banks, the Commission acknowledges. It found, however, that the aid measure was aimed at well-defined objectives of common interest; it is well designed to deliver them and limits the distortions of competition. The aid is available to any individual at risk of losing their home as a result of the financial crisis, and to all banks that have granted mortgages in Hungary. (C.D./transl.rt)