ECONOMY

Rush to enjoy Katseli law status

rush-to-enjoy-katseli-law-status

One out of four mortgage debtors are under the protection of the Katseli law, according to the official data on pending applications at Greek courts that Kathimerini has seen.

There are some 135,000 borrowers whose applications for protection of their primary residences are still pending, while another 60,000 already enjoy the protection provided by the law introduced by former economy minister Louka Katseli. This takes the number of debtors whose primary residences are provisionally or definitively protected by the Katseli law to almost 200,000, with the sum of their debts coming to 17 billion euros.

The official court data that Kathimerini has seen confirm the original estimates by banks about applications more than doubling ahead of the expiration of the Katseli law. The law, whose protection provision has been extended till February 28, concerns properties valued at up to 280,000 euros (for a five-member family).

The figures reveal that the rate of new applications for protection has more than doubled since Greece emerged from the bailout programs last summer: In the last quarter of 2018 new applications numbered 12,500, against 5,365 in the third quarter and 6,435 in the second. This is a clear indication that many borrowers have scrambled to make use of the protection provided for by the law that is about to expire.

There is also the impressive number of applications whose hearings have either been canceled or ended in a compromise after the applicant’s withdrawal: The number of canceled cases soared from 1,200 in the second quarter of 2018 and just 268 in the third quarter to 3,200 in the last three months of 2018; likewise compromises and withdrawals came to 2,000 in October-December, from 1,384 in the second quarter and 360 in the third.

The market attributes this to the lifting of bank confidentiality for all applicants for the Katseli law provisions after September 15: This has forced many borrowers, who did not want this confidentiality to end, to withdraw their applications and reach a settlement with their creditor banks.