WARSAW: The Polish government will seek to gather PLN 600 million for a fund to help distressed mortgage borrowers, now being framed in fresh legislation by the ruling party Civic Platform PO, PO MP and lower house public finance committee head Krystyna Skowronska said Wednesday.
“The fund will be PLN 600 million,” Skowronska said. Contributions from individual institutions will be made based on the data from Poland’s regulator KNF. The total cost for banks could increase to PLN 1 billion should all eligible borrowers, i.e. some 38,000 as per the estimates of the authors of the bill, take advantage of the program, she added.
The program, previously flagged by PO, will be addressed to mortgage borrowers who lost their job and whose liability exceeds the real estate value or whose monthly installment exceeds 60% of household income. There will also be extra criteria regarding e.g. the size of the property in question.
Relief will consist in PLN 1,500 monthly allowance at zero interest rate disbursed over a maximum period of 18 months and – apart from exceptional cases – due for repayment in 8 years. Applications for relief could be filed until end-2018 and the fund would operate until 2026.
The fund will be run by state bank BGK and managed by a board comprising representatives of the Finance Ministry and financial market watchdog KNF, financial ombudsman, Banking Guarantee Fund head as well as a representative of one of five banks which extended the biggest number of mortgage loans.
