SEB, Swedbank have foreclosed 500 homes this year

28.12.2009, 11:45

The number of homes foreclosed by the two largest banks SEB and Swedbank in Estonia has doubled this year.

ERR reports with reference to Eesti Päevaleht that in addition to 500 homes foreclosed by bailiffs on the request of Swedbank and SEB, also other smaller banks have tens of apartments and houses on their hands.

Priit Perens, CEO of Swedbank Estonia, says that the trend is growing and expects the number of foreclosures to increase further next year. "While the percentage of overdue business loan repayments seems to have stabilised, defaults of private loans continue to increase, mainly because of unemployment growth.

According to Perens, the big question is the period of high unemployment. "Our practice shows that borrowers who have received a grace period for their loan principal or interest payments have overcome their problems relatively well. However, this will change if unemployment grows and becomes a long-term problem."

In a related story, unemployment insurance fund announced that registered unemployment is now at 13.3%. Last week 1,467 new unemployment were registered. Registered unemployment in Ida-Virumaa on Northeast Estonia is 19.2%, followed by 18% in Võrumaa and 16.6% in Valgamaa. The figure in Jõgeva and Tartu county was 10.1%. By December 23, the number of registered unemployed amounted to 87,239 people out of the total employable population of 656,200.