With 90% Off Sale, Vulture Funds Snap Up Greek Bank Bad Debt

FILE - A man walks outside the headquarters of the Bank of Greece, in central Athens, on Monday, Jan. 28, 2019. (AP Photo/Petros Giannakouris)

ATHENS – Greek banks buried under a mountain of bad loans plan to shed 60 billion euros ($67.76 billion) and offering to sell them to distress fund collectors for discounts up to 90 percent, giving up on trying to collect on people buried under austerity for nine years.

Distress funds that have purchased portfolios of so-called Non-performing loans (NPL’s) from Greek banks have already begun managing them and are eager to take on even more, confident they can collect where the banks couldn’t.

Prime Minister and Radical Left SYRIZA leader Alexis Tsipras reneged on promises not to let debt collectors hound people who can’t pay because of successive pay cuts, tax hikes, slashed pensions and worker firings under austerity attached to 326 billion euros ($368.17 billion) in bailouts.

Debtors are being called incessantly to repay even if they can’t and upcoming sales include blocks of business loans with and without guarantees, shipping-related loans, and mortgages, with Tsipras – who said “not one home in the hands of banks” – letting them foreclose on debtors.

Most portfolios are separated into two categories, the first being   business loans with guarantees, and the second consumer loans and business borrowing without guarantees, the business newspaper Naftermporiki said in a report on the distress funds role.

Non-performing consumer loans without guarantees are now attracting the biggest interest by distress funds, with the “haircut” offered in some cases reaching 90 percent, allowing the collectors to make a profit by pushing people to pay even a part of what they owe.

Not included is some 250 million euros ($282.34 million) owed by the former ruling New Democracy Conservatives and the now-defunct PASOK Socialists who aren’t repaying and with the bank officers approving the loans given immunity from prosecution.