Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Financial Services UK newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360, London (April 2, 2020, 12:56 PM BST) -- Sweden's financial regulator told banks on Thursday they can exempt homeowners from mortgage payments until June 2021 if they have lost their jobs or fallen ill with the coronavirus, after other countries enacted similar measures.
The offer to defer mortgage payments would give lenders the flexibility to continue to lend "in these uncertain times," the watchdog said.
Ultimately the decision to grant mortgage "holidays" to households would be taken by the banks, based on individual assessments, the regulator, known as Finansinspektionen or FI, said.
Sweden has mostly remained open for business during the coronavirus outbreak, unlike many other European countries. Few mandatory restrictions have been put into place: a contrast with neighboring nations, which have taken a tougher approach with some enforcing lockdowns.
"In Sweden, the economic forecast is rapidly deteriorating," the regulator said. "Due to the uncertainty about the future, many households are becoming concerned about their personal finances."
The regulator said it will put forwarded its proposals and plans for banks to be able to suspend mortgage payments from April 14.
"The amortisation requirement increases Swedish mortgagors' ability to handle difficult times," Erik Thedéen, general director of the regulator, said. "When the economy is under a lot of pressure, it is reasonable to give households the maneuverability to use those margins."
The regulator has already told banks to scrap dividend payments to shareholders so they can channel money into households and businesses during the COVID-19 crisis.
The FI's proposals follow measures by other European countries to offer a mortgage payment holiday to borrowers who are struggling as a result of the coronavirus crisis.
In the U.K., Chancellor of the Exchequer Rishi Sunak announced on March 17 that British banks could deliver mortgage payment breaks of up to three months to help homeowners weather the economic impact of the coronavirus pandemic. The measure was part of a package of government loans worth £330 billion ($410 billion).
Meanwhile Spain, France and Italy are introducing temporary moratoriums on mortgage payments for citizens affected by the disease.
--Editing by Ed Harris.
For a reprint of this article, please contact reprints@law360.com.
