TALLINN — SEB Bank is multiplying its efforts in freezing mortgaged assets for clients who can’t service their loans. This year, more than 800 bank clients have had their assets locked down by SEB, preventing their sale or use at a quantity five times more in than all of 2008.

The decision to freeze the assets is made after the bank decides the debtor cannot make loan payments and may sell the asset for less than it is worth, SEB Bank told Baltic Reports.

“The numbers of these [asset] limitations have grown, but it is obvious why the problems we have now are bigger than last year,” Silver Vohu, SEB Bank’s head of communications said.

Though the next step beyond applying to the court for asset freezing is to begin reclaiming assets, the bank claims this is not its intention.

“This is just a limitation that show they have a debt and they are not servicing their commitment. It doesn’t mean we are reclaiming the property. This is just a formal thing that shows they don’t have the right to do transactions,” Vohu said.

The limitation on the asset means that the owner cannot do anything with it without prior consent from the bank.

In Estonia banks can now order courts to freeze mortgaged assets from the court via the Internet for amounts less than 100,000 krooni (€6,400). Vohu said this has allowed many banks to make more of these moves.

Following the freezing of assets, the client may take a “loan holiday period” where they look for a job and try to work out a payment plan. If this is unsuccessful or the debtor is unavailable, then the bank would take further action against its client.

“Its in nobody’s interests to reclaim someone’s real estate — we want them to service the loan as agreed,” Vohu told Baltic Reports.

The method of freezing assets in this way was first made popular by BIGBANK, a small loans dealer that gives loans to high risk clients.

Since the onset of the crisis though, other banks have begun to employ the technique.