Leasing option for borrowers
The new code of practice for the handling of bad loans, which the Bank of Greece has published for consultation, provides for borrowers who cannot repay loans secured against their home to be able to remain at their property by renting it after transferring the ownership to the bank.
In effect, this signals the extension of the leasing option to mortgage loans too, in an effort to deal with the problematic issue of nonperforming loans, especially following the expiry of the period during which main residences are protected.
The code published makes it possible for the borrower to transfer his or her property to the bank and to sign a lease contract for a minimum of five years during which he or she will pay rent.
In such cases, the borrower will have the benefits of the existing legislation regarding leasing, which allow him to buy back his property after the expiry of the five-year period at a price previously agreed with the bank.
