From Iceland — Government Takes Steps to Ease Pressure on Families

Government Takes Steps to Ease Pressure on Families

Published October 8, 2010

The Icelandic government has extended a moratorium on foreclosure auctions until the end of March. The Prime Minister told parliament that the protests have affected her personally, and wants every party to come together for a solution – which every party except the conservatives seems to be willing to do.
People who lose their homes to their banks because they can’t pay their mortgage are almost always compelled to leave their homes, which the bank then sells at a reduced price at an open auction. Such an auction marks the final nail in the coffin for many of these families, as there is no possibility of their being able to save their homes at that point. While there has been a moratorium on these auctions, it was due to end at the end of this month. However, yesterday the government extended this moratorium to the end of March.
Members of the Social Affairs and Insurance Committee have been meeting with the managers of Iceland’s now-private banks, urging them to show greater flexibility and creativity when it comes to dealing with families behind on their mortgages. Failure to do so, they have warned, will result in “more drastic measures” taken by the government to put pressure on the banks. Meetings with bank managers earlier this work have left government officials optimistic, it was reported.
Addressing parliament yesterday, Prime Minister Jóhanna Sigurðardóttir said that the protests that have been going on around the country have affected her personally. “No one should be homeless in Iceland,” she said in part, adding that she wants to build greater cooperation between the government and interest groups representing the Icelandic public. “Representatives of the Progressive Party and The Movement have come to the table on this matter, and I welcome this especially.”
The prime minister did not mention the lack of attendance from the conservatives, who have refused to work with the government. Independence Party chairman Bjarni Benediktsson told reporters that his party will not work with the government over possible solutions to the country’s economic situation “so long as the government continues to steer the economy in the wrong direction”.

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