Representative of Greece’s four systemic banks – Alpha, Eurobank, Piraeus, and National Bank of Greece – are holding their second meeting in a week this evening with the government’s economic team at the PM’s office.
The focus of the meeting will be a new law establishing the framework for the protection of debtors’ primary homes from foreclosure.
The new law will replace that of former economy minister Louka Katseli, the so-called Katseli law, the extension of which is expiring.
There are expectations that the two sides can reach agreement today so that the final plan can be submitted to Greeces’ creditors for approval immediately.
The elements of the protection from foreclosure that must be finalised are the maximum tax value of the property, the income of the borrower, and the maximum value of the remaining part of the loan that is not being serviced.
Sources close to the talks say that there has been significant progress and that a swift agreement is feasible.
The proposal that was handed over to the bankers so that all possible scenarios can be reviewed reportedly provides for protection of borrowers with non-performing home loans and business loans for which a home was used as collateral with a tax value of up to 200,000 euros.
It should be noted that in most instances the tax values of properties were determined before the crisis began in 2009 and are substantially higher than the current market value.
There will be a ceiling on remaining part of the loan that is not being serviced which is expected to be somewhere between 120,000 and 150,000 euros maximum.
Banking sources estimate that about 200,000 delinquent loans will be included in the new framework.
At the moment, 30,529 foreclosed properties have been listed on an electronic auction platform and must be put on the block by September, 2019. Of these, 683 properties are scheduled be auctioned off next week.
