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UPDATE 1-Hungary FX loan fix in limbo as government signals delay

* Economy minister says more time needed to assess legal situation

* Declines to say how long legal assessment could take

* Govt has discussed various scenarios to tackle forex loans (Adds detail, more comments)

By Gergely Szakacs

BUDAPEST, Oct 31 (Reuters) - Hungarian Economy Minister Mihaly Varga indicated delays in resolving the issue of households' foreign currency mortgages on Thursday, saying more time was needed to assess court rulings before making any official proposal bullet-proof.

Borrowers in the central European country took out forex loans, mostly in Swiss francs, because they offered low interest rates before 2008. But their repayments in forints have soared as the Hungarian currency weakened in the wake of the economic crisis.

On Monday, Varga said the government would unveil its own solution "promptly" unless banks in Hungary present a comprehensive fix by a deadline this Friday. But in the latest twist to a long-running issue, he said on Thursday that more time was required to analyse recent court decisions, referring to cases brought by borrowers against their banks, alleging illegal or excessive fees.

"There is no economic solution without the legal side being sorted out," Varga told a news conference, declining to respond to repeated questions on when the government's proposals could be made public or submitted to parliament.

He said further possible court rulings in the coming "weeks and months" could also affect the final shape of the solution.

The government of Prime Minister Viktor Orban's centre-right Fidesz party, which faces elections by May next year, has initiated several schemes in recent years to ease the burden on these borrowers.

One scheme in 2011 left banks with about 1 billion euros in losses, and the country's mostly foreign-owned lenders fear the government may impose more losses on them under a new scheme.

Varga said he had "done his job" and presented various scenarios at a government meeting on Wednesday built on a framework laid out earlier, reiterating the main points of the government's plan, but did not elaborate.

He said the proposals would phase out forex mortgages, ensure that forint borrowers would not be short-changed and also take account of the central bank's indication that it would like to avoid a decline in its foreign currency reserves.

Hungary's central bank has said that, if needed, it would provide foreign currency from its reserves for a solution at prevailing exchange rates.

"There are many economic solutions," Varga said. "However, the government cannot resolve one issue in itself: namely to eliminate the legal uncertainty that results from conflicting legal practices."

Varga said the government still aimed to resolve the matter swiftly, however, this was only possible if the legal basis of the solution was rock-solid.

The government has said it wanted predictable monthly repayments on the mortgages 15-20 percent lower than now, adding that forint borrowers cannot be short-changed in the process.

Varga said the government would phase out foreign currency mortgages within 3-5 years. (Editing by Mike Collett-White and Susan Fenton)