Greek State Will Subsidize 20-50% Mortgage Costs of Eligible Debtors

FILE - Anti-foreclosure protesters outside the Bank of Greece on Feb. 21, 2018, to denounce the loss of people’s homes. (Photo by Eurokinissi/Tatiana Bollari)

ATHENS – After bending to bailout creditors and allowing more primary residences to be seized after Prime Minister and Radical Left SYRIZA leader Alexis Tsipras swore “not one home in the hands of banks,” the government – in an election year – said it would pay for 20-50 percent of the mortgages of those who can prove hardship.

That would apply whether homeowners  reach a settlement in court or via the out-of-court mechanisms to protect their main residence from repossession.

While the subsidy rate will depend on each household’s dues and income, the subsidy for corporate loans secured against the debtor’s primary residence will have a flat rate of 30 percent if the borrower meets the criteria set, said Kathimerini.

The subsidy will only be granted if a debtor meets all the criteria in place, concerning the value of their main residence, the amount due, the total value of their assets (realty or other) and the level of income, which constitutes the basis for the rate of the subsidy to be granted. The decision provides for the approval of subsidy applications within 15 days of submission on the online platform set up for the new protection framework.

Tsipras had promised to protect homeowners even without the creditor’s backing but instead backed down and sent to Parliament an amendment lowering the threshold of mortgage amounts and corporate loans secured against a borrower’s primary residence, putting more homes on the chopping block.

The ceiling for corporate loans to be eligible for protection under the new scheme has dropped to 100,000 euros ($112,285) from 130,000 ($145,970) of the outstanding balance, said Kathimerini.

After that was done, the Eurozone and Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) released nearly one billion euros ($1.12 billion) in the return of profits creditor banks made in Greek bonds as part of a debt relief deal held back.