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Parliament rejects amendment against quick mortgage foreclosures

Friday, Feb 20, 2009

Parliament rejected on February 19 at the second reading a bill that sought to amend Bulgaria's Credit Institutions Act that would allow lenders to begin foreclosure proceedings on mortgaged properties only after six interest payments were overdue.

Currently, banks can foreclose on a mortgage if a single payment is late, although such cases remain very rare.

The authors of the amendment bill, independent MPs Mincho Hristov and Stela Bankova, argued that because of the economic slowdown and the credit crunch, "many Bulgarian households could find it difficult to make their monthly payments on time and lose their residence."

The bill failed to secure the support of Parliament's budget and finance committee, which said that the amendment was opposed both the Bulgarian National Bank and the Association of Banks in Bulgaria because it put debtors' rights above creditors' rights.

"The attempts to put debtor rights ahead of creditor rights are unacceptable," Iskrov told a forum dedicated to Bulgaria’s economic prospects during the current crisis on February 18.

"There are proposals being made by non-governmental organisations and members of Parliament in that sense, but if that is allowed to happen, it would cause a serious negative impact and Parliament should reject them."

Source: Sofia Echo