Vulnerable households with a loan secured against their primary residence should as of July 1 have the chance to log on to a special online platform and declare their intention to join the Property Purchase and Leaseback Entity in order to to save their home, according to a proposal by the country’s systemic banks to the state.
The document borrowers would obtain from that new platform can be their passport to the subsidy of their loan tranche in the transitional period, i.e. until the entity is activated in late March 2022.
This was the full proposal the lenders argued for at a video conference on Monday with the Finance Ministry, focusing on the support program for vulnerable households after the expiry of the moratorium on main residence auctions, at the end of this month. The program will be activated so that those households are protected from any forced measures, such as repossessions and auctions, until the new entity is created. According to ministry planning, the program will provide for the subsidy of their mortgage loan tranche along the lines of the model provided by the new bankruptcy code, regardless of whether they new entity has begun operating.
The banks’ proposal that Monday’s conference call examined provides for subsidies based on two alternative scenarios:
– A subsidy of 70 to 210 euros per month depending on the family and asset status of each borrower, without any contribution from the debtor, or
– A subsidy with the borrowers’ contribution whose amount will be determined based on the taxable value of the mortgaged property according to the Single Property Tax (ENFIA) declaration, and on their family status.
It is reminded that the so-called second-chance law (i.e. the new bankruptcy code) also allows borrowers to save their main residence either through the out-of-court debt settlement process or through the Property Purchase and Leaseback Entity. This protection exclusively concerns vulnerable households, which are entitled to a state subsidy to have their loans rearranged or to continue living in their main residence while transferring its ownership to the new entity.
The monthly subsidy may range between €70 and €210.