Justice minister: Reintroduction of non-accessory mortgages could boost banking sector

Budapest, May 18 (MTI) – The reintroduction of the non-accessory mortgage into the Civil Code could boost lending and thereby increase the Hungarian banking sector’s competitiveness, the justice minister said in parliament on Tuesday before submitting a proposal for a Code amendment.

László Trócsányi noted that the institution of the non-accessory mortgage, a security interest otherwise known as an independent lien, existed in Hungarian civil law before the second world war. From 1996, the Civil Code reintroduced and regulated it while the Code adopted two years ago abolished it, replacing it with a separated mortgage. This is not known or recognised internationally and it does not have the advantages of the non-accessory mortgage, he said. Further, it did not work in practice, the minister added.

He emphasised that the mortgage market would be boosted while customers would get access to lower interest rates. At the same time, the security of retail savings and investments would be enhanced, he added.

Photo: MTI

Source: http://mtva.hu/hu/hungary-matters