ECONOMY

Growing number of houses at risk

Courts across the country will be flooded with cases of foreclosure and legal attachment, warned the president of the loan recipients’ federation, who estimated the cases will exceed 150,000 this year. The president of the National Federation of Associations for the Protection of Consumers and Loan Recipients, Evangelos Kritikos, told a press conference yesterday that the rising trend of the phenomenon in Greece suggests it will period in the period 2010-2011, when foreclosure and attachment applications will reach an estimated 200,000 to 250,000 annually. The reason for the worsening of the problem, Kritikos said, is the «interest rate shock» which loan recipients will suffer if they have acquired a loan at a low rate for its first few years. Many such loans were taken out between 2002 and 2004 and the low-rate periods are now expiring. The number of mortgage loans not being serviced now totals 30,000, while during 2008 a further 20,000 housing loans will either cease to be serviced or will be in arrears by one to three installments. Kritikos criticized banks for allegedly «operating a cartel» and accused the Bank of Greece for its »lack of presence» in matters pertaining to the protection of loan recipients. He presented data showing that in 2007 there were 120,000 applications for foreclosure and legal attachment, up from 100,000 in 2006. Some 40,000 of these were filed in Athens courts and involved amounts up to 40,000 euros. He also proposed an amendment to the law on the protection of consumers which, if approved, will mean that banks will not be able to foreclose on main residences for amounts owed – from mortgage loans and credit cards – that are less than 10,000 euros.