The Government stands behind the Fidesz proposal to extend the exchange rate barrier scheme, however, consultations at the Ministry for National Economy will continue, Minister for National Economy Mihály Varga said.

The Minister added that experts of the Ministry will continue talks until the problem of borrowers of foreign currency home mortgages is settled satisfyingly.

Fidesz faction leader Antal Rogán announced at a Budapest press conference that the Fidesz recommends unhindered access to the exchange rate barrier scheme and the extension of the home evacuation ban for the entire winter period.

The relevant bill which summarizes proposals for the relief of foreign currency debtors was already submitted to Parliament on Monday. After the Fidesz faction meeting, the politician said that the proposal is expected to be debated on the same day and adopted by MPs, through an accelerated procedure, on Tuesday.

According to the proposal, the evacuation ban shall be applied for the entire winter period, commencing with the date when the resolution comes into effect and ending with 30 April. Speaking about the foreign currency barrier scheme, Antal Rogán said that according to the proposal the existing scheme – which is applicable for both foreign currency home mortgages and home equity loans – shall be open to everyone who until now could not join the system.

As the Fidesz politician explained, several requirements are restricting access to the exchange rate barrier scheme, such as the condition that borrowers who have failed to pay instalments for over 90 days are not entitled to join the system. Antal Rogán added that there are about 150 thousand families with such arrears who are nonetheless willing to repay their debt and against which a foreclosure procedure has not been launched yet, “accordingly, the full opening of the exchange rate barrier scheme could provide a solution for them.” On the other hand, just as before, joining the system will not be obligatory.

The faction leader emphasised that the deadline set for banks, before which financial institutions should have incorporated pro-client amendments into loan contracts, expired on 1 November.

Although contracts have not been modified, Antal Rogán continued, the Hungarian Banking Association has drafted a proposal which should be made public and about which consultations should be launched with those affected.

Responding to a question the faction leader said that the Government would welcome if the Curia adopted a common legal stance as soon as possible with regard to foreign currency loan lawsuits.

Under the foreign currency barrier scheme, repayment exchange rates are fixed at 180 CHF/HUF, 250 EUR/HUF and 2.5 JPY/HUF which rates are applicable for up to five years or until the maturity date of the loan contract.

The difference between the fixed and the actual exchange rates is collected at a separate account. The extra costs thus incurred are split between the bank and the state of Hungary, while the client shall repay only the principal at a later date.

The amount collected at the separate account constitutes a forint loan with an interest rate which during the duration of the exchange rate barrier contract cannot exceed the three-month interbank rate.

(Ministry for National Economy)