Iceland forgives mortgage debt of its population. (May 8, 2012) Total Media Blackout
Not true, unfortunately; a simple Google search/fact check, found the story to be exaggerated/untrue - as I suspected, given this footage being the only mention of it (the standard of cross-checking on here, really does leave much to be desired sometimes).
See here and here… as for what really happened…
IMF says targeted debt reduction policies can work:
… The government and the newly constructed Icelandic banks developed a template to be used in case by case restructuring discussions between borrowers and lenders. The templates facilitated substantial debt write-downs designed to align secured debt with the supporting collateral (i.e bring the loan into line with the value of the house) and align debt service with the ability to repay.
The IMF found that such case by case negotiations safeguard property rights and reduce moral hazard, but they take time. As of January of this year, only 35% of the case by case restructuring applications had been processed. To speed things up, Iceland has introduced a debt forgiveness plan which writes down deeply underwater mortgages to 110% of the households’ pledgeable assets.
It noted that only when a comprehensive framework was put in place and a clear expiration date for relief measures announced that debt write-downs finally took off. As of January 2012, 15 to 20% of all Icelandic mortgages have been or are in the process of being written down.
However, it said the jury is still out on Iceland’s plans, and said the extent to which Iceland can put its citizens back on their feet and minimise moral hazard remains to be seen. [via RTE]
Note the difference: written down, not written off.
A step in the right direction nonetheless, but not quite what this incorrect report makes it out to be.
Mind you, Iceland and it’s people have indeed put the rest of our ‘democracies’ to shame on occasion.
Az “Izland elengedte a lakosság ingatlanhiteleit” hír margójára. Mondjuk így is fasza lépés.