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Ecuador law would forgive debt on defaulted mortgages of first-time buyers

•, By Associated Press
 Ecuador’s legislature has passed a bill that would require banks to forgive any outstanding debt on mortgages for first-time home buyers of properties worth up to $146,000 if they default and forfeit the home.
The measure, aimed at discouraging a real estate bubble of the type that has caused so much pain in the United States and Europe, won praise from many Ecuadoreans on Wednesday. The country’s banking industry did not immediately comment.
Approved Tuesday evening by a 68-21 vote, the bill also covers loans by banks to first-time purchasers of automobiles that cost up to $29,200.

President Rafael Correa, a leftist economist whose social spending has made him widely popular, praised the legislation but did not say whether he would sign it or possibly seek amendments.

The president, who constantly rails against Ecuador’s “oligarchs” and has already moved to diminish the power of banks, accused the lawmakers who voted against the measure of “defending the bankers, not the depositors.”

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