Of Leonida Stergiou
Continuous meetings are held at the Ministry of Finance, with the competent bodies in recent days with the aim of accelerating the extrajudicial mechanism, while in about two weeks a new meeting is expected with the Ministry of Justice to resolve the problem with the stagnant cases of N. Katselis the 40,000. Meanwhile, the applications for a certificate for a vulnerable borrower stopped, when it became known that, in addition to protection against auctions, the certificate also means the acquisition of the property by the sales and lease back when it starts in 2023. It was also decided not to give any extension to the Bridge 1 and Bridge 2 installment grant schemes.
All this, together with the evaluation and the course of the new bankruptcy, was put on the table again yesterday, in a meeting that took place through a teleconference between the Ministry of Finance and the loan management companies. The following emerged from the meeting:
First, the new bankruptcy as an institutional framework and as a technological infrastructure work. The baby problems have been normalized and the requests and regulations in the out-of-court mechanism are starting to accelerate, but other corrective actions should be identified, such as the creation of a payment culture and the treatment of delays, for example through the cases of N. Katselis.
Secondly, The original intention to extend the installment grant programs for households (Bridge 1) and for businesses (Bridge 2) was rejected, through which 84,000 borrowers were settled and subsidized with loans totaling 5 billion euros (3.5 billion and 1.5 billion). , respectively) and with a total grant budget of EUR 600 million. The Bridge 1 program, which ended in August 2021, was extended until the end of 2021, while the Bridge 2 (eight-month) program, which started last June, ended a few days ago. The original intention was to extend these programs. However, according to information from Capital.gr, the request was rejected by the institutions due to budgetary burden, but mainly because the continuous extensions do not create a culture of payments.
Thirdly, a joint finding of the dysfunction of N. Katselis but also of the new effort to expedite the cases by speeding up the courts, something that practically did not work and there are cases that exceed 40,000-45,000. Also, this malfunction and the inability to speed up the trials do not work to create a payment culture or to prevent strategic defaulters along with real vulnerable debtors.
Fourthin order to “get rid” of the issue with Mr. Katselis, a new round of meetings was agreed with the Ministry of Finance, the Ministry of Justice and the involved bodies (management companies, etc.), starting in about 10 days.
Fifth, Within the next few days, a clarifying legislation will be submitted, regarding the intermediate stage of protection of vulnerable debtors, until the operation of the body for the acquisition and re-lease of real estate. The condition is that the borrower meets the criteria of the vulnerable and that the first house is in danger of being auctioned. Then, by applying to the platform for a vulnerable certificate, it is protected from the auction, until the creation of the body that will acquire the property, while it also receives the provisions of the new bankruptcy.
The out-of-court settlement speeds up
The “baby problems” have passed, such as the acquaintance of the interested parties, accountants, lawyers, chambers, etc., something that can be seen from the acceleration of the applications that are now finalized in the out-of-court mechanism.
Already, about 3,000 applications have been finalized, corresponding to loans totaling 1.5 billion euros. Within 2-3 weeks the result of the out-of-court mechanism is expected, ie settlement, bilateral negotiation of a debtor with the State or rejection. It is estimated that more than 1,000 cases will be settled by the beginning of April, when to date the total does not exceed 300 from the beginning of last June. It is noted that there are more than 20,000 applications in the queue that are one stage before finalization, as a document is missing. In total, there are more than 45,000 applications at all stages, most of which have gone through the privacy consensus stage and are in the data collection stage.
The help desk of servicer
The first expected problems were overcome, such as familiarity, incomplete data, connectivity with various authorities, but also services that had not been digitized. The role of the investment of the management companies for the creation of the help desk was important, which receives about 100 questions per day from lawyers, accountants, borrowers and other interested parties, with the resolution rate reaching 95%.
Intermediate protection for the vulnerable
According to an announcement by the Ministry of Finance, the program provides a state subsidy for the mortgage installment of vulnerable debtors in the amount of 70 to 210 euros per month, depending on the composition of the household. The duration of the program will be 15 months and will be submitted to Parliament for a vote in the near future. The main benefit for vulnerable debtors is the avoidance of creditors’ measures (eg foreclosures, auctions and evictions).
Eligible are debtors who meet the income, property and other criteria established and applicable in the welfare program “Housing Allowance”, according to which:
(a) the total income must not exceed EUR 7,000 for a single person household, increased by EUR 3,500 for each member of the household and up to EUR 21,000 per year, regardless of the composition of the household.
b) the total taxable value of the real estate must not exceed the amount of 120,000 for a single person household, increased by 15,000 euros for each additional member and up to the amount of 180,000 euros.
In addition, the property limit applies to deposits, bonds, shares, etc. which applies to the “Housing Allowance”.
These criteria are checked and cross-checked when issuing a certificate of vulnerability, which is necessary for participation in the program and is issued by a special electronic platform of the Special Secretariat for Private Debt Management.
How does it work
The program will be implemented through a special electronic platform, developed by the Special Secretariat for Private Debt Management. In this way, debtors’ recourse to the courts is avoided, as was the case in the past, with consequent long delays and more permanent effects on the payment culture.
The online platform will be user friendly, eliminating the need for manual collection of supporting documents when submitting the application and significantly reducing bureaucracy. In addition, the electronic platform will carry out automated checks and crossings, in order to prevent and exclude strategic defaulters.
At the end of this program, vulnerable debtors who are unable to service a long-term and sustainable settlement should contact the Special Debt Settlement Agency for a second chance. This Institution will acquire the first residence of the specific vulnerable debtors and then will re-lease it to them for 12 years. The State will provide a monthly housing allowance, in order to support their obligation to pay rent. At the end of the 12-year period, the debtors will have the exclusive first privilege to repurchase the house, as long as they have recovered financially. The Ministry of Finance will hold a public international tender to attract potential investors for the creation of the Agency, which is expected from 2023.