Portuguese families continue to face serious difficulties in paying their mortgages.
According to data from the Central Credit Register of the Bank of Portugal, more than 660,000 Portuguese families currently are in default on their mortgage repayments.
The unemployment rate is still at high levels and the high tax rate on household income largely explains this huge default rate but despite the 600,000 households in this situation, the trend is downwards.
There has been a drop of 9,000 cases since June this year but don't be fooled as much of this reduction has been due to individuals managing to restructure overdue loan payments with their bankers who have been ordered to be more flexible.
According to the same statistics, almost 151,000 families in September could not afford to pay anything at all towards their mortgages. Phone, electricity and food are considered more important when choices have to be made.
Since the beginning of 2014 nearly 5,200 families stopped paying anything into their mortgage accounts which, according to the banks, leaves them little option but to repossess.
Others disagree and the behaviour of banks towards its debtors throughout this recession has in general been reprehensible as they call in loans to suit their own balance sheets and not their customers’ interests.
This will not go unforgotten and there already is a shift from the corporate sector to issue bonds rather than borrow from banks which currently are still unwilling to advance credit despite the economy crying out for liquidity.
The Post Office is soon to launch its own bank with an emphasis on lower grade customers and many high street bank account holders will move over as soon as there is an alternative.
Comments
If you are unfortunate enough to have been destroyed by banks , your assets are offered for sale though at a percentage of their value.
Banks operate in generational terms with assets and debts , compared to customers whom only have a lifetime.They expect everyone to take their hit for them , and out GOVTS are all too eager to allow it.
Say what you want about Gordon Brown , he was clued to this , rather than bail out a bank on a Govts Credit , part natioanised them instead...but what the media wont tell you is that HMG uk has profitted since day one...even without selling off its shares!
But at least Sr Salgado has his millions stashed away, so he is all right.
This is nothing like the true picture as there will be hundreds of thousands more who have 're-scheduled' their payments with their banks. Paying almost nothing in. But thereby staying in their properties so the bank cannot repossess and sell them on.
So weakening the Portuguese banks ... who have 'assets' that are, whilst inhabited, 'worthless'.
Then bundle in BES / Novo Banco and Millenium's failure in the ECB stress tests and the low stock market valuation of all Portugese banks.
It doesn't help that, 'handing back your house keys to the lender' ... does not work here. If you borrowed 100,000 you must pay back 100,000 - plus whatever interest along the way. So what if your house is now only worth 75,000 and you have lost your job. Tough !
Capital flight guys .... Ryanair your money out of Portugal. You know it makes sense !!!
You didn't cause this problem - so why lose out trying to 'patch it up' ?