ECONOMY

Protection framework for holders of mortgages

protection-framework-for-holders-of-mortgages

Borrowers with mortgages secured against their main residence will receive extended protection by the government if they can show that they have been adversely affected by the health crisis.

The main components of the safety net being pondered by the government are the extension of Law 4605 for home protection through online applications, and a state subsidy for a certain period of time – most probably for nine months – of the monthly installments for loans secured against the main residence of borrowers hurt by the pandemic. This last provision will also concern performing loans, i.e. consistent borrowers.

At the same time, the government, in cooperation with its creditors, is drafting a plan to accelerate the resolution of pending court cases regarding debts, whose stock has increased because of the suspension of court proceeding in accordance with the Covid-19 restrictions. The plan includes the creation of an online platform for rescheduling outstanding hearing.

These interventions will effectively constitute a bridge until the introduction of the new bankruptcy code, which has also been postponed by a few months.