Banks Rapidly Gain Foreclosed Properties after Economic Collapse Skip to content

Banks Rapidly Gain Foreclosed Properties after Economic Collapse

Since the economic collapse the amount of assets reclaimed by banks has increased dramatically. Collectively, Landsbankinn, New Kaupthing and Íslandsbanki own at least 347 lots, cars, stables, summerhouses as well as homes, Fréttabladid reports. Foreclosure proceedings have been frequent among banks to collect collateral on defaulted mortgages.

Thingvellir. Photo by Páll Kjartansson.

New Kaupthing and Íslandsbanki have 107 properties combined. Landsbankinn will not disclose its property portfolio.

Berghildur Erla Bernhardsdóttir, a spokesperson for New Kaupthing, explains that as the economy worsened the number of properties held by the bank has increased, although it’s difficult to estimate the precise value of the properties. A few of the eighteen summerhouse lots and sixteen summerhouses now owned by the bank have been collected as collateral against loans to contractors.

Gunnar Kristinn Sigurdsson, a spokesperson for Íslandsbanki, says that the bank has approximately 70 automobiles currently being sold. “The bank’s assets have increased as was foreseen due to the worsening economic situation. On the other hand, it is important to bear in mind that most such matters have a long history, often reaching a year back in time.”

Sigurdsson also explains that the lots owned by the bank have come into their possession both due to loans to individuals as well as business owners. He says that it would be impossible to estimate the value of that asset portfolio.

According to information from Landsbankinn, the number of properties owned by the bank has significantly increased since the crash in October, mainly consisting of houses and lots for homes and summerhouses. The bank declined to disclose the exact value of the portfolio.

Earlier this month it was disclosed that Landsbankinn had bought 45 summerhouse lots in an auction in Grímsnes, a large summerhouse area an hour’s drive from Reykjavík. Additionally, the bank bought 26 summerhouse lots and eight summerhouses in another auction earlier this year. This brings the bank’s total to at least 71 summerhouse lots and 17 summerhouses.

Also, Kaupthing and Íslandsbanki together own 34 summerhouse lots and 17 summerhouses. This means that the total ownership of the three banks is at least 113 lots for summerhouses and 25 summerhouses.

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