It was introduced only on paper in 2020 – supposedly to protect the first home – and now they’re pushing it to 2025
His government can Kyriakou Mitsotakis to run in order to “liberate” the Greek banks from the remaining “red” loans with “Hercules 3”. He may have already guaranteed the amount of 18 billion euros for “Hercules 1” and “2”. It may have removed primary home protection from 2019 and generally run to satisfy the banks, shadow funds and servicers. But in one matter he has chosen to go with the Arab.
It was 27.10.2020 when Law 4738 regarding the establishment of the Real Estate Acquisition and Leasing Agency came into force. It was supposed to replace first home protection so borrowers wouldn’t lose their home. According to the institutional framework, this institution will buy the debtor’s first residence and lease it to him (twelve years). The owner would become a tenant but at least there would be no evictions that would come if a third party acquired the property.
In fact, for Mr. Mitsotakis to add… sensitivity towards debtors who will lose their homes, a monthly rent allowance has been instituted through the Organization of Welfare Allowances and Social Solidarity (OPEKA) to anyone who joins this regime, in order “to help him stay in residence”.
Discussions on discussions only
Three years, three months and 15 days have passed since then. What has been done with the institution’s establishment and operation? Discussions upon discussions and essentially nothing. The “sensitive” Prime Minister Mr. Mitsotakis demonstrates his well-known lack of social empathy towards a real problem of Greek society, at the same time that he runs the auctions at the expense of the “red” debtors.
The quick tax collector Kostis Hatzidakis just 20 days ago he announced as the responsible Minister of National Economy and Finance that the second cycle of dialogue for the agency with the alleged investors is starting. The goal of the Mitsotakis government is to complete the procedures at the end of 2024 so that the operation of the organization can start from 2025! As can easily be seen, the Mitsotakis government is in no hurry to make this euphemistic protection of the first residence work yet. Factors from the banks, however, express the certainty that the body will not finally be established in 2025!
Over 100,000 auctions
However, from 27.10.2020 to 31.12.2023, when the new framework was instituted, in which the transformation of the owner into a tenant was baptized by the Mitsotakis government and the systemic media “protection of the first residence”, a total of 138,488 auctions have taken place, of which 54,884 concern residences.
In more detail, they have been posted on the electronic auctions platform:
- 3,246 auctions from 28.10.2020 to 31.12.2020, of which 1,203 concern residences.
- 22,563 auctions from 01.01.2021 to 31.12.2021, of which 8,717 concern residences.
- 51,318 auctions from 01.01.2022 to 31.12.2022, of which 20,526 concern residences.
- 61,361 auctions from 01.01.23 to 31.12.2023, of which 25,438 concern residences.
To all of them should be added 16,953 (7,214 of which concern residences) auctions already posted for 2024 (estimated to exceed 61,361 in 2023). But, as is obvious, Mitsotakis and Hatzidakis they are in no hurry, since they prefer society to be squeezed and the real economy to be crushed by private debt.
See also: Hatzidakis Law: 40-50,000 auctions in 2024
Housing as a social and investment good
The residence is a social good, however the value that accompanies it makes it an investment good, particularly attractive in terms of the commitment of capital that can come from savings or borrowing.
It is common knowledge that previous legislative interventions such as the suspension of auctions, Law 3869/2010 on over-indebted households and the new Bankruptcy Code did not definitively solve the problem. In the case that the logical consequences of the default are the forced execution and the auction of every property, the answer is not easy, because the solution of the equation includes more coefficients. Borrowing for the purchase of housing differs from that for the consumption of other goods. In housing loans, the so-called “collateral” has been calculated, i.e. the mortgage and the total economic value of the investment property. On the contrary, in consumer loans and credit cards, the absence of the guarantee increases the interest rate, as the corresponding risk is factored into it.
It is estimated that the omission of the calculation of the value of the guarantee in the protection measures documents the non-inclusion of the real value and the risk of the investment. Although the mathematical and economic reasoning is correct, the protection of the residence with rules, due to its dual nature, is generally considered necessary. This protection could include the definition of the vulnerable, with a combination of economic and social characteristics, adequate (but clear) limits, the possible discrimination of debt and the calculation of the required public expenditure.
Read also: SYRIZA’s “No” to the ND bill on bad loans – Submits a law proposal
SYRIZA sources: The Mitsotakis government provides “service” to servicers instead of taking care of the first residence
Again at the mercy of the servicers thousands of borrowers through a hidden provision by the Mitsotakis government
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