0
Posted March 20, 2013 by Samantha Meade in Markets
 
 

Drop of House Prices; Proposed Change in Denmark Mortgage Policy

Drop of House Prices; Proposed Change in Denmark Mortgage Policy
Drop of House Prices; Proposed Change in Denmark Mortgage Policy

It is reported that today some representatives of Denmark industry of mortgage will see the government in regard to the issue of easy repayment rules. It is estimated that this year, there will be threats of foreclosures due to the repayment policy terms and condition.

It is speculated that the Mortgage Bankers’ Federation along with the Association of Danish Mortgage Banks will be going for a meeting with Annette Vilhelmsen, the business minister regarding decisions about borrowers who are unable to afford loans with interest which they took a decade back when mortgage demands had kick started in the current year. It is observed that borrowers are struggling badly in order to get out of the deep property slump of varied house prices which dropped down to levels of 2005.

Curt Liliegreen, the chief head of the Center for Housing Economics which is based at Copenhagen said in a telephonic interview that almost 80 percent of house owners who are under the age of 35 years are caught in deep trouble; thus heightening the threat on the economy of Danish.

The housing crisis of Denmark started in the year of 2008 when the country’s property level got busted, thus showing deep signs of crisis. As per reports of two prominent mortgage companies, it is observed that the prices dropped by 2.8 percent in the last annual quarter in comparison to the last year. It is speculated that there are more than 100,000 houses that require for special negotiation terms in order to meet their terms of loans and obligations, as reported by a study of the University of Southern Denmark in the month of February.

The mortgage industry of Denmark showed $590 billion in the year 2003 when borrowers were provided with the option of amortization for long time period, that is almost a decade. the concept of interest mortgage became highly popular, and is seen to have grown by 56 percent, leaving behind other loan varieties such as home loans, as reported and stated by the Association of Danish Mortgage Banks. This move is however disapproved and criticized by central bank, with the argument that this policy has inflated the growth of Danish growing into the phase of recession.

According to the plan that is approved by the industry of mortgage, which they want the government to sanction, it is stated that homemakers will be able to consider their property dues as two separate loan options. They are of the opinion that this move would provide them with the freedom of indulging in roll over debt, thus ensuring almost 80 percent loan value with the new interest scheme. The report also starts that if the proposed change is not approved, there is high chance that borrowers will have to repay back the entire amount at once.


Samantha Meade

 
Samantha Meade is a General Assignment Reporter. Samantha graduate of Northwestern's Medill School of Journalism and a graduate of the University of Florida, where she majored in broadcast journalism. The Associated Press has recognized Samantha for four of her business and market features. She was also nominated four times for a national Cable Ace Award. In 2003, Samantha won a Georgia Association of Broadcasters.