Mortgage grace period for immigrants

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The President of the Portuguese Banking Association said on Tuesday that Portuguese immigrants would now also have access to a period of grace regarding mortgage payments.

The APB’s Fernando Faria de Oliveira said they would have the right to apply for a temporary suspension on mortgage payments in an interview with RTP3 adding that the measure was being “worked on” and would be ready in the next few days.

The banks are preparing a private moratorium on mortgages and corporate loans which will complement the public one announced by the Government at the start of April which until now has taken in permanent main residences and companies.

On the programme ‘Tudo é Economia’ (Everything is Economy) the bank association boss said that the temporary freeze on mortgage payments would, in addition to consumer loans, include homes that are not being lived in as a permanent primary residence in Portugal because the owners lived and worked overseas.

Faria de Oliveira said the association had “consulted the Competition Authority” (Autoridade da Concorrência) and had “received some recommendations” and “we’re trying to introduce them,” he stressed, promising clarification “very shortly in the next few says.”
The APB president also remarked that there had been “some failures regarding financing companies”.

“In the beginning there were some difficulties of a processing and bureaucratic nature. The banks are now taking around two to three days to make their initial approvals, which is very good” he said.

In an interview with the weekend paper Expresso, the APB president admitted to a contraction in the Portuguese economy of up to 20% by the end of the second quarter, as Portuguese Finance Minister Mário Centeno had admitted on television “is a bomb”.

“This is a lot more than a recession. To have, as we’ve had in recent months, a fall in GDP of 20% in practically unimaginable. It’s a bomb shell!”

The banking industry representative said that the crisis “could not but affect the banking system” echoing the Minister of Finance who warned that Portugal’s GDP could fall between 16%-20% , but admitted that for the year as a whole, the contraction would not exceed two digits, at around 7%-7.5%.

Faria de Oliveira said, however, that the Portuguese banking system has “more reserves and is better prepared than it had been in the previous crisis” with “capital cushions” that could “absorb part of the losses” but “great care” had to be taken.