Ecuador law would forgive mortgage debt - WAOW - Newsline 9, Wausau News, Weather, Sports

Ecuador law would forgive mortgage debt

QUITO, Ecuador (AP) -

Ecuador's legislature has passed a law that would oblige banks to forgive any outstanding debt on mortgages to first-time home buyers of properties worth up to $146,000 if they default and forfeit the home.

The law would also apply to loans by banks to first-time purchasers of automobiles that cost up to $29,200.

President Rafael Correa praised the law after it passed 68-21 on Tuesday evening. He did not say whether he would sign it or possibly seek amendments.

The bill's sponsor says that if Spain had passed a similar law a decade ago it could have avoided the housing bubble that has caused so many to lose homes.

The director of Ecuador's private banking association has said the legislation would discourage construction, and would make getting mortgages more difficult.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

Powered by Frankly