Banks to resume home auctions in September; 2,500 on cards by end 2021
Some 2,500 properties repossessed by banks will be going under the hammer in Greece by the end of the year as forced auctions resume after a break brought on by the pandemic.
Online sales had been put on hold by the Greek government in a bid to protect vulnerable borrowers, while new bankruptcy regulations where voted on earlier this year by parliament, introducing changes, such as providing a second chance for those in financial strife.
Bank officials say that the forced auctions will commence in coming weeks.
Vulnerable borrowers, those with an income of up to 21,000 euros (for families with dependent members) will remain exempt from the property auctions, as will those affected by this summer’s devastating forest fires.
The updated legal framework is seen speeding up the procedure with the reduced involvement of courts, boosting the chances of a buyers being found for the asset.
This is expected to lead to higher recoveries for lenders and debt management agencies who had opposed an across-the-board freeze on property auctions, arguing that most of the ones scheduled to take place now relate to loan defaults that arose well before the pandemic hit.
Under pressure from its official sector creditors, Greece approved a
new insolvency framework that introduces a holistic approach to insolvency legislation and enables households and businesses to settle their debts, to the state, social insurance funds, banks, loan servicers and other private creditors, according to PwC.
The introduction of a second chance allows natural person to be discharged from their financial obligations under certain conditions.
Other key changes include the introduction of a digitalized out-of-court process aimed at a pre-insolvency phase aimed at supporting the refinancing process with creditors.
State subsidy payments were also brought on for those struggling to keep up with their mortgage amidst the downturn created by the pandemic. The Gefyra (Bridge) program for individuals pays for most of the monthly payment for a period of 9 months in a bid to reduce the amount of new non perfoming loans to come out of the lockdown periods.
Government officials say that a three month extension to the Gefyra program (ending in September) is currently being examined. A second Gefyra program also exists for businesses.