The MPs argue that while the transfer of non-performing loans (NPLs) to funds has helped banks reduce their bad debts, it has left borrowers unprotected. “Loans worth €86.96 billion are now in the hands of funds,” the MPs said, referencing Bank of Greece data. “Borrowers, facing well-capitalised private firms based outside Greece, now find their properties—especially their homes—at the centre of these funds’ profit-seeking strategies.”

The MPs behind the question include Fotini Arabatzi, Giorgos Vlachos, Vassilis Yogiakas, Thanasis Davakis, Nikitas Kaklamanis, Anna Karamanli, Theodoros Karaoglou, Christos Boukoros, Marios Salmas, Evripidis Stylianidis, and Maximos Charakopoulos. Ironically, these same MPs had previously supported ND-backed legislation, such as the Bankruptcy Code, which removed key borrower protections.

In their query, the MPs noted: “Despite long-standing efforts to create an out-of-court debt settlement framework to avoid forced property sales, these efforts have not delivered tangible results.” They cited recent data from the Union of Loan and Credit Claims Management Companies, which reported over 2.27 million debtors with loans amounting to more than €90 billion.

The out-of-court debt settlement mechanism, introduced to alleviate the burden on households and businesses, has largely failed to achieve its aims, according to the MPs. They blame this on the reluctance of loan servicers to engage with the process, pointing out that only recent pressure from the authorities has brought about marginal improvements.

The MPs also condemned a widely criticised practice in which banks sell loans to funds at a fraction of their face value, only for the funds to demand repayment of the full loan plus interest from the borrowers, sometimes auctioning off properties. “In some cases, real estate companies connected to the funds acquire the properties at auction, while the same bank that sold the loan profits indirectly through a sole proprietorship tied to the fund,” the MPs said.

The MPs outlined several concerning issues:

  • Significant delays in processing out-of-court settlement requests, with some taking over six months, often without halting enforcement actions.
  • Unfair repayment terms, with borrowers being asked to pay 30%-40% of their total debt upfront, in breach of Civil Code Article 281.
  • Inadequate communication about debt balances and adjustments to instalments, leaving borrowers unclear about their obligations.
  • A lack of cooperation between regulatory and legal departments, with management companies ignoring court rulings that protect borrowers’ assets from foreclosure.

The MPs asked Finance Minister Hatzidakis to clarify several key points:

  • How many out-of-court settlements involve financial institutions, and how many support vulnerable borrowers or people with disabilities?
  • Will the government ensure that debtors are informed about both proposals and counter-proposals in out-of-court debt settlements?
  • Will participation in out-of-court settlement mechanisms be made mandatory for banks and loan servicers?
  • Will the government require that all preliminary procedures are followed before confiscation measures are imposed?
  • Will first-home protection be strengthened to cover as many borrowers as possible?
  • Will the government investigate and regulate the reported practice of banks ensuring fund profits through property auctions?
  • Will a mandatory electronic platform be created to hold funds accountable for their loan management practices, with sanctions for non-compliance?

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