People Consider Stop Paying Mortgages in Iceland Skip to content

People Consider Stop Paying Mortgages in Iceland

An increasing number of Icelandic residents are considering launching a payment strike—stopping paying off their mortgages in protest of a lack of government intercession to assist indebted households.

Central Reykjavík. Photo by Páll Stefánsson.

“A number of people have contacted us and declared their interest to participate in some sort of a payment strike. And that group is growing,” Thórdur B. Sigurdsson, chairman of the Interest Group for Households told Morgunbladid.

The organization, in unison with the Homeowners’ Association, have declared their support for proposals made by Gísli Tryggvason, the Consumer Spokesman, last week on an emergency law in the interest of consumers in which housing mortgages would be expropriated and reduced in accordance with estimates determined by legal arbitration.

Sigurdsson stated that the 11,000 members of the two organizations are behind the declaration of support, adding that the government has to react swiftly because the patience of borrowers is reaching its limits.

Tryggvason has presented his proposals to the ministers of the cabinet but hasn’t received any reaction. He said a lot is at stake and that the government only has a few weeks—only a few days, even—to take action.

Tryggvason explained that he is not encouraging people to stop paying their mortgages but that a number of people are considering it, especially now that the freezing of mortgages—a temporary solution—is about to expire.

Minister of Social Affairs Ásta Ragnheidur Jóhannesdóttir told Morgunbladid that the government is aware of the problems households are facing and how important it is to react to those problems as soon as possible.

“Here all of us are working day and night on these pressing matters. No one should doubt that. We realize that we have to work quickly and effectively on all of these issues that lie ahead,” the minister stated.

However, Jóhannesdóttir does not believe that the method proposed by the Progressive Party, to write off 20 percent of all debt, is the right course of action.

Click here to read about other solutions proposed by the government.

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