Banks, Financial Services, Latvia, Legislation, Loan, Real Estate

The bank took the decision after Saeima passed amendments to the Insolvency Law earlier today that, in commercial banks' opinion, will limit young families' opportunities to buy new homes significantly.

"Just a short while ago, the government completed work on a new support program to help families take out mortgages, even if they do not have enough money for the down payment. The new law passed today (Sep. 25th) will force lenders to increase both the down payment amounts and the criteria on borrowers' minimum income – which renders the support program meaningless. Inexplicably, the legislators are, on the one hand, trying to improve access to loans, while on the other hand, they make loans much harder to take out," notes Ainars Balcers, the head of the Swedbank Decision Making Center for Individuals.

The bank's employees will individually get in touch with the almost 200 clients who have inquired about the new program via Swedbank online banking service, offering them to take a mortgage without relying on the state support program.

As reported, Saeima yesterday approved amendments to the Insolvency Law, according to which bank mortgages issued to borrowers who buy a home/apartment, and have no other domicile, will be considered non-recourse loans. The regulation will apply only in those cases where the debtor's home/apartment is sold due to the person's insolvency.