Firms may buy bad mortgages

Firms may buy bad mortgages

Nomura, the consultancy company which has been hired by the government for advice on bad-loan management strategy, is proposing the sale of nonperforming mortgage loans to special funds and debt management companies, sources have told Kathimerini.

In a press conference on Monday, Economy Minister Giorgos Stathakis responded to a question on how much the sale of the mortgage – or even corporate – loans to foreign funds could fetch, he reiterated “our position is that the matter is a subject of negotiation.”

However, Kathimerini understands that the proposals tabled by Nomura include extending the banks’ capacity to sell loans beyond the consumer loans and into mortgages. A similar proposal concerns corporate loans, although this is a category that requires special handling, particularly for major enterprises whose financing involves a number of banks.

On the issue of the debts of households or small enterprises that are secured by homes, Nomura proposes the concession of their management to special companies set up for that purpose. Similar companies have functioned well in markets such as Spain, where they have access to borrowers’ economic data so as to establish their real capacity to repay their loan. That information includes debtors’ properties and assets in a way that protects their personal data, and figures related to their credit capacity.

Nomura has also identified various legal and tax obstacles that can obstruct the procedure for borrowers to return their property to a bank, for instance. Among the issues that need addressing are the property transfer tax, the Single Property Tax (ENFIA) and the various levies that make managing a property ineffective and nonprofitable.

Regarding the active management of debts, those special-purpose companies will be cooperating with certified estate agency networks. They will also be able to contact the borrowers, which so far only banks and the few certified debt collection companies have been able to do.

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