ASÍ Seeks Restructuring of Mortgage System In Iceland

Published February 8, 2013

The Icelandic Confederation of Labour (ASÍ) is seeking to restructure the mortgage system in the country, proposing the adoption of a model similar to what is being used in Denmark.
In a press release on their website ASÍ outlines their motivations behind suggesting the restructuring, stating that the current mortgage system in Iceland places all of the risk and burden on the borrower, which has prolonged the detrimental effects of the financil collapse for many Icelandic households. The proposed Danish model would see the risks of borrowing shared more evenly between the lenders and borrowers, and would give property buyers the option of favourable, secure long-term loans with fixed interest rates. This system would also abolish the effects of inflation on mortgages in Iceland, RÚV reports.
In Denmark, only mortgage banks are permitted to issue loans against the purchase of real estate. The mortgage banks seek investors to purchase bonds for the strictly appraised value of the property being purchased and the funds paid for the bond are issued to the borrower. The borrower then pays the principle and interest to the mortgage bank, which reimburses the investors. This divides risk between investor and borrower and decreases the likelihood of default.
Following the economic collapse many homeowners in Iceland found themselves unable to keep up with mortgage payments, as their mortgages had either been tied to foreign currencies (and, therefore doubled or tripled when the króna collapsed) or mortgages tied to inflation were increasing at a rate that could not be maintained as salaries have not similarly increased with inflation.
Related:
Robbery By Math


News
Young Entrepreneurs Start Business For Acid Attack Survivors In India

Young Entrepreneurs Start Business For Acid Attack Survivors In India

by

CEOs Kormákur Arthúrsson says that he and Sigurbjörn B. Eðvarðsson they established the company KrummiSpice to ameliorate the situation of women who have suffered acid attacks in India. Interviewed by RÚV, Kormákur said that perhaps the topic could be seen as somewhat random, but that he and his partners had stumbled upon the issue, and felt outrage over how authorities in India react to such attacks. “The mood in India is that when a woman suffers such an attack, a hideous crime, she gets asked: what did you do to deserve this? Eighty percent of those who suffer such attacks

News
Alþingi Members’ Wages Too Low, Warns Vice Member

Alþingi Members’ Wages Too Low, Warns Vice Member

by

On Tuesday, Sigurður Örn Ágústsson, vice member of Alþingi on behalf of the Independence Party, said that work conditions and pay of Alþingi members must be taken up for reconsideration. Sigurður recommends raising his own and other members’ salary. This was reported by RÚV. Sigurður claimed that the basic wages of members of parliaments in Iceland’s neighbouring countries, presumably the Scandinavian countries, were two to three times higher than average wages. Sigurður further cited the irregular working hours of MPs, which he says extend, unpaid, into evenings, nights and weekends, while “chances are that a large portion of the country’s

News
Most Serious Case Of Political Corruption Ever, Says Professor

Most Serious Case Of Political Corruption Ever, Says Professor

by

Jón Ólafsson, professor of philosophy at the University of Iceland, says that the interference of former Interior Minister Hanna Birna Kristjánsdóttir of a police investigation into her ministry exemplify more serious corruption in Icelandic politics than has ever been evident before. Last week, Alþingi’s ombudsman published the conclusions of his investigation into the former minister’s conduct, while in office. The report reveals and officially verifies what had already become generally known: that the minister repeatedly interfered with the investigation, through direct contact with former Police Chief Stefán Eiríksson. Stefán Eiríksson left his office following this. The minister’s assistant, Gísli Freyr

News
Women Unprotected As Supreme Court Drops Restraining Orders

Women Unprotected As Supreme Court Drops Restraining Orders

by

Iceland’s Supreme Court has dropped a restraining order against a man who is suspected of physically abusing his ex-partner and recently confessed to sending graphic sexually explicit videos of her to her work colleagues, reports Vísir. “I was in shock,” said Juliane Ferguson of the verdict. “I thought that the court was allowing him to be the victim instead of seeing who really was the victim, and that he had more rights than the victim.” Juliane has been living in Kvennaathvarfið – a women’s shelter for victims of domestic abuse – after being allegedly attacked by her now ex-partner in

News
Woman Rescued From Harbour In Medically Induced Coma

Woman Rescued From Harbour In Medically Induced Coma

by

The woman whose car ended up in Reykjavík Harbour last week and spent 30 minutes in the sea before being pulled out, remains in the ICU in a medically induced coma, reports Vísir. As reported, the unnamed woman was rescued from her sunken car in Reykjavík harbour last Monday and transferred to the National University Hospital. Divers continued to search the water after the woman was rescued before it was established that she had been alone and a crane pulled her vehicle from the harbour. Eye witnesses reported seeing the trunk of the vehicle open as the car went over the edge

News
Cat Burglar Caught! Cats Reunited With Owner

Cat Burglar Caught! Cats Reunited With Owner

by

Metropolitan Police tracked down the pantless cat burglar who stole three Bengal cats last week, reports RÚV. The three stolen Bengal cats have been reunited with their owner, cat breeder Ólafur Sturla Njálsson, who has been using social media to petition for their return since they were taken from his home. The Metropolitan Police – whose only physical evidence was an abandoned bra and a pair of leopard print sweatpants – managed to track the thief down to a house in Reykjavík last night and collect the cats. Ólafur Sturla, who picked the cats up from the police station last

Show Me More!