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View Diary: The big banks aren't done screwing you over (181 comments)

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  •  you want to screw with us? (6+ / 0-)

    ask the banks.  Well, watch what happens:

    On IMF advice, [Iceland’s] government handed over controlling interest in the new banks to creditors of the old banks. The aim was to minimize the cost of refinancing the banking system – but not to destroy the economy. Loans that were transferred from the old banks to the new after the 2008 crash at a discount of up to 70% to reflect their depreciated market value. This discount was to be passed on to borrowers (households and small businesses) faced with ballooning principal and payments due to CPI indexing of loans.

    But

    the economy’s survival is [surprise!] not of paramount interest to the aggressive hedge funds that have replaced the established banks that originally lent to the Icelandic banks. Instead of passing on the debt write-downs to households and other debtors, the new banks are revaluing these loan principals upward.

    Thus,

    Icelandic mortgages and many other consumer loans are linked to the country’s soaring consumer price index. Owners of these loans not only can demand 100% of face value, but also can add on the increase in debt principal from the indexing. Thousands of households face poverty and loss of property because of loans that, in some cases, have more than doubled as a result of the currency crash and subsequent price inflation. But the IMF and Iceland’s Government and Supreme Court have affirmed the price-indexation of loan principal and usurious interest rates, lest the restructured banking system come to grief. (emphasis commenter’s)

    The more we get to them, the rougher they are going to react.  We're not playing beanbag, here.  They have their business model, after all:

    •  Meh. (2+ / 0-)
      Recommended by:
      NM Ward Chair, bablhous

      The hæstiréttur (Icelandic Supreme Court)  ruled... I think it was last week, but it could have been earlier... that they can't pass on the full cost of the indexed loans.

      And yes, Iceland has a crazy house loan systems.  Did you know that there's not a such thing as a credit history here for home loans?  Dead serious; I just got back from talking with an Icelandic real estate agent here.  Your interest rates are based on your salary.

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