Bloomberg News

Dutch Forced Sales of Mortgage-Guaranteed Homes Increase 20%

October 04, 2011

Oct. 4 (Bloomberg) -- Money-losing forced sales of Dutch homes with mortgages backed by the Homeownership Guarantee Fund climbed 20 percent in the third quarter.

The government-backed fund received 458 requests for compensation compared with 381 applications a year earlier, the manager of the fund, National Mortgage Guarantee, or NHG, said on its website today. The average payout rose 10 percent, mainly because of declining house prices.

Dutch house prices dropped the most in 14 months in August as rising interest rates, lending restrictions and Europe’s debt crisis discouraged buyers. Rabobank, the biggest Dutch mortgage lender, expects prices to fall 2 percent this year and 2.5 percent next year, after slipping 2 percent in 2010 and 3.3 percent in 2009.

The fund will compensate 42 million euros ($55 million) of losses through the third quarter, up from 30.1 million euros a year earlier. Zoetermeer, Netherlands-based NHG rejected 74 applications in the quarter compared with 30 a year earlier and expects to compensate 2,000 losses this year, almost half due to divorces.

--Editors: Jennifer M. Freedman, Jeffrey Donovan

To contact the reporter on this story: Jurjen van de Pol in Amsterdam at jvandepol@bloomberg.net

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net


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