Loan holders go under

More than 55,000 court decisions are expected by the end of the year on real estate confiscations against loan holders unable to make payments, officials told Sunday’s Kathimerini as data shows that banks have excessively eased lending procedures to boost profits. The president of the Loan Holders Association, Theodoros Thanopoulos, pointed out the unfavorable conditions faced by Greek credit holders with financial problems. «In Europe, if a lender has suffered some sort of damage or is ill and cannot pay back the loan, he is given some time. He has some chances,» said Thanopoulos. «In our country, they ask the loan holder to immediately pay back the whole amount owed, especially when they know the loan holder is in possession of a real estate property that can be sold straight away,» he added. Strong credit growth in Greece, among the highest in the eurozone, has helped support record bank profits in recent years but increased competitiveness in the sector has resulted in more aggressive lending practices. A series of interest rate hikes by the European Central Bank has squeezed loan holders, who have seen their monthly payments increase significantly this year. The Bank of Greece, the country’s central bank, has warned against reckless lending practices. Banks appear to be preparing to take advantage of the growing number of confiscations by setting up subsidiaries that take part in the repossession procedure. «There is no bank that has not set up a real estate company to take advantage of property sold due to the overborrowing of households,» said Evangelos Kritikos, president of the National Federation for the Protection of Consumer Loan Holders. Announcements of homes going under the hammer are not widely published and only a small group of people operate in the sector. Information from the consumer protection group also showed that 60,000 court decisions are expected to be made by the end of 2006 that will relate to the confiscation of cars.

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