UniCredit SpA, Italy's biggest banking company, announced Tuesday that it has offered 30% of its home mortgage customers a one-year suspension of payments to help them in weathering economic and personal difficulties.
The offer covers 260,000 homeowners with incomes below $32,000.
They will be eligible for a suspension in the event of a job loss, a divorce for couples with children, or the death of one of the parties who took out the mortgage, the Milan company said.
Italy's economy, the third biggest in the euro region, contracted in the third quarter, and the country slipped into its worst recession in 12 years.
Mortgage relief measures passed by the government have forced bankers to link new variable-rate mortgages to the European Central Bank's benchmark rate, rather than money market rates, which have surged during the credit crisis.
The Italian government also has repeatedly called on banking companies to offer relief to clients. In return, the government has said it is ready to help companies in need of financing by underwriting bonds.
UniCredit said its suspension offer is valid until Dec. 31 of next year.
Suspended payments will be paid when the mortgage comes due, the company said, and it will not charge the borrowers penalties.