BUSINESS

Last chance for debtors to protect their homes from foreclosure

EVGENIA TZORTZI

TAGS: Economy

Debtors with dues from mortgage loans or corporate loans secured against their main residence and who fulfill the strict criteria provided by the new law on home protection will get one final chance to save their primary residence from confiscation and have their debt arranged via the online platform set to be launched by the Special Secretariat for Private Debt Management next Monday.

The criteria concern the amount of the debt, the value of the residence the loan is secured against, income level and the total property assets of debtors; failure to meet any of the criteria means banks may put those debtors’ homes up for sale. Debtors can only settle dues via the new platform from loans secured against their primary residence and not consumer loans or credit card debt – which comprise the lion’s share of debts.

The strict criteria of the new law and the fact that other dues are excluded significantly reduce the catchment of the new platform. In theory, the new law concerns 180,000 debtors, but according to estimates by legal experts it will only have a limited benefit for a small share of debtors and quite a few people are taking it for granted that the impact of the new protective framework will be revealed in September, when the banks are set to resume property auctions, which for now have been halted due to the elections.

Alternatively, one could still request debt settlement through the court process, but since the end of February there has been no framework to protect primary residences or to determine the monthly installment due to prevent homes from being put up for auction.

The new platform that opens on July 1 will remain available until December 31, 2019, and provides for an automatic procedure through which the eligibility of borrowers will be examined. When a debtor meets all the necessary conditions, their application will be forwarded electronically to the banks concerned, which will provide a settlement proposal with favorable terms within one month.

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