ATHENS – After Prime Minister Alexis Tsipras had reneged on his vow, “Not one home in the hands of banks,” his ruling Radical Left SYRIZA has struck a deal with Greece’s four major banks providing protection from foreclosure of primary residences on two conditions.
Scrapping the Katseli Law that provided wider protection to homeowners, the government plan agreed with the banks will exempt confiscations if the amount owed on a mortgage is under 130,000 euros ($146,580) and taxable price under 250,000 euros ($281,890).
There’s also an income criterion for state subsidies for loan provisions, Kathimerini reported, as borrowers with annual incomes up to 20,000 euros ($22,551) will be able to have part of their installments covered by the state.
The amount the state intends to set aside for this purpose exceeds 450 million euros ($507.4 million) for 2019-20 and primary residence protection will be provided via an online platform that will be created where borrowers should file their applications.
Borrowers who take the option of settling their debts through the primary residence protection mechanism will be charged a 2 percent annual interest rate while the repayment period will be up to 25 years, the paper said.
If the balance of their loan exceeds 120 percent of the value of their main residence that their loan has been secured against, it is possible that a part of their dues will be written off as well.
The new system was one of the reforms to which the government had to impose as part of a third bailout deal of 86 billion euros ($96.97 billion) with the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM).
Reneging on vows to protect homeowners, Tsipras lifted a moratorium protecting them that was put in place by his predecessors, the now major rival New Democracy Conservatives and to let banks seize homes online to get around sometimes violent protests during auctions held in courthouses.