Greece to submit foreclosure bill on Friday with or without lenders’ approval

Greece to submit foreclosure bill on Friday with or without lenders’ approval

Greece is planning to submit a bill to parliament on Friday to protect borrowers from home foreclosures, a government official said on Wednesday, though it is yet to secure the agreement of its lenders on its terms.

A wrangle over rules governing loans that have pledged a primary home as collateral helped delay the release of about 1 billion euros from Greece’s lenders, including the European Union and the European Central Bank, earlier this month.

The lenders, who are still monitoring Greece’s progress after it emerged from an international bailout seven months ago, want stricter terms than those proposed by Athens.

“Talks between the government and the supervisory institutions over the clarification of technical details will continue until Friday,” the official said, without clarifying if the government would submit the bill without securing lenders’ consent.

To conclude its second-post bailout review and qualify for the cash, Athens needs to get the green light from lenders before the new framework passes into law.

The issue is set to be discussed at a meeting of eurozone deputy finance ministers on Monday. A Commission representative said on Wednesday he is optimistic a deal can be reached before a meeting of eurozone finance ministers on April 5.

Greece has been working on a new framework to succeed a law protecting borrowers from home foreclosures to accelerate the clean-up of bad loans burdening its banking sector, while protecting those hit by the crisis.

Its latest disagreement with lenders hinges on the scope of the new legal framework, including ceilings on primary home market values, income criteria to qualify for protection and the inclusion of small corporate loans.

A banker told Reuters on Wednesday that talks had reached a stalemate. Greece wanted to include a total of 11 billion euros in sour loans in the new scheme, while the lenders had capped the amount to 6-7 billion, another banker said.

Sour loans account for about 45 percent of banks’ overall loan book. The country has promised regulators it will take steps to shrink bad loans by more than a third by the end of 2019. [Reuters]

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