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Agreement on mortgage loans reached

An agreement reached between the Greek government and the representatives of the institutions (EC, ECB, IMF, ESM) sees subsidizing installments of mortgage loans for more vulnerable households and debt write-offs for households with an annual income of 35,000 euros and real estate worth less than 230,000 euros.

The deal helps 25-35% of borrowers from the initial 16-20% of borrowers with non-performing loans (NPL).

An amendment to existing Law 3869/2010 for the protection of primary homes of residence places specifications for the protection of homes, notes a reasoned opinion. This would mean that a mortgage holder would be able to provide a court liquidiation order until December 31, 2018, seeking exemption from the property foreclosure provided that disposable income does not exceed a reasonable level and the property amount doesn not exceed 180,000 euros for single mortgage holders (+40,000 euros for married mortgage holders and 20,000 euros per child for up to three children).

Finance Minister Tsakalotos said banks have little interest in proceeding with foreclosures with the depreciated real estate market. Tsakalotos said that the Katseli law offering protection to home owners was good during the period of economic downturn but failed to resolve the issue of NPLs.

The regulatory framework for protecting home owners will have a duration of three years, with a revision expected to be examined at the end of that time.