Greece’s creditors appear ready to agree to a solution on foreclosures in the form of a housing benefit for people in need that would not be associated with the protection of debtors’ main residence.
If approved, the benefit will be paid out in the context of the government’s social policy and will concern people who have been left homeless because their property has been put up for auction or has come into the ownership of a bank or a fund that has acquired the loan secured on the property, or even because their property has been liquidated in the context of a bankruptcy procedure.
Bad mortgage loans currently weighing on Greek banks’ portfolios add up to almost 24 billion euros, while another bad debt pile of 37 billion euros concerns nonperforming corporate loans, many of which are also secured against real estate assets.
According to estimates, the total number of properties in Greece that are linked to loans and will be transferred through the securitization process is close to 140,000. This will create a potential ticking bomb for the government and for society as a whole after the expiry of the existing primary residence protection framework at the end of April.