Greece Will Let Banks Seize Homes

ForeclosureNextExitBending to demands from international lenders, Greek Prime Minister Antonis Samaras’ coalition government will let banks foreclose on homes of customers, many of whom have suffered big pay cuts, tax hikes and slashed pensions under austerity, setting aside a bill that would have provided debt relief and with no measures geared toward directing banks to allow restructuring of loans.

The move could severely test the administration of the New Democracy Conservative leader whose government has a shaky thin five-vote majority in the Parliament even with the backing of its partner, the PASOK Socialists, who are also going against their party’s platform to let banks confiscate even primary homes of people who can’t afford to pay.

Finance Minister Yannis Stournaras said the freeze on foreclosures will end and banks will be allowed as of Jan. 1 to start taking people’s homes. “It auctions aren’t liberalized then banks will collapse,” from bad loans, he told the newspaper Real News.

He didn’t mention the debt relief plan nor allowing mortgagors to restructure loans. Each time the government moves to imposing additional austerity measures it says the economy will collapse unless it does.

A handful of MP’s from the ruling parties said they are unhappy with the idea, with one saying earlier it could spark “civil war,” but they are expected to be talked to and persuaded to back the plan. Samaras and PASOK leader Evangelos Venizelos have in the past ejected lawmakers fro the party for not following their orders on how to vote. Greek MP’s generally are required to vote the way their party leaders direct them.

Even though they are getting 50 billion euros ($65 billion) in recapitalization loans from the government – PASOK and New Democracy owe banks 250 million euros ($313.16 million in bad loans but aren’t required to pay back to the banks dependent on them  – many Greek banks have been insisting customers pay their loans, mortgages and credit cards in full despite losing nearly half their disposable income. That has created a 42 percent default rate.

Banks and the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) have been pressuring Samaras to lift a ban that expires at the end of the year that bars banks from foreclosing on homes. The banks want to take them and auction them off.

The Troika has already put 38 billion euros ($50.67 billion) into rescuing Greek banks who were put into financial hot water when Venizelos, who was then finance minister in a previous government, imposed 74 percent losses on private investors, nearly wiping out small bondholders in the Diaspora and destroying Cyprus’ banking system in the process.

The Troika, which has spent about 38 billion euros ($50.67 billion) between them to rescue Greek banks, is squeezing Athens to take measures to clean up lenders’ balance sheets and institute reforms to insure that banks get paid first.

Sveral lawmakers from the country’s two-party ruling coalition said they still oppose foreclosures although in the past when they’ve voiced some dissent they’ve been brought into line. New Democracy MP Sophia Voultepsi earlier this month said lifting the ban was a bad idea.  “People will take their shotguns… a collapsing property market is better than a civil war,” she said.

Another 11 lawmakers from New Democracy and its junior coalition partner, the Socialist PASOK party, are pushing for the freeze to be extended, newspaper Eleftherotypia reported which could put Samaras in a bind and test whether his government can stay together. Stournaras however said, “There will be social and economic criteria to protect the really needy” but he didn’t say what it would be.

Property foreclosures have already triggered protests in other indebted, crisis-hit European countries such as Spain. Greece is in the sixth year of a deep recession with 1.4 million people out of work and more than 110,000 businesses closing in the last three years. The country is being kept alive by two bailouts from the Troika totaling $325 billion but more could be needed yet, Germany’s central bank, the Bundesbank reported.

Greece’s auction freeze currently covers first homes worth less than 300,000-495,000 euros, depending on whether owners are married and have children.  Some 80 percent of Greeks own their homes but 29 percent of people with mortgages aren’t paying, which could mean scores of thousands of homes would be seized and add more people to the ranks of the homeless.


  • ibid

    “Bending to demands from international lenders, Greek Prime Minister Antonis Samaras’ coalition government will let banks foreclose”
    It seems all Samaras is doing these days is bending. Skipse kai glipse.

  • Nik

    It is the only way to make liars and lazy people to have some kind of responsibilities towards hard earned money of European taxpayers. Good step forward.

  • Deep_Sea_Diver

    I believe your being very hard on Greek people. The worlds banks started the mess & now they will be able to put families on the streets in mid winter. I know Greek politicians cheated & lied about their economy for several years, but think it wrong that the two parties that are responsible are now willing to throw people out of their homes to pay for their mishandling of the Greek economy. As for, “hard earned money of European taxpayers”. Please remember, the European taxpayers had no say in the billions that the troika have paid in bailouts, & I think most would have prefered Greece to revert back to the Drachma. The bailouts were never intended to help Greece, they were to save a failed currency that was ill thought out by our “clever” masters in Brussels

  • Zultra

    Many will suffer you cretin.

  • Tony Belluci

    I dont see why its not in the interest of the banks to restructure the mortgages to some of these home owners in order to make them payable. I dont disagree, banks should repossess their assets in some cases because individuals should of not bought them in the first place if they cannot afford them long term. The difficulty lies that housing in Greece is still way over valued and prices make no sense to me living in Canada. They have low turn over/resale ratios plus retail sale values make no sense to the average income earned. People are not making the money they are suppose to on average yet they all can afford to live in over valued homes? Plus renting those same homes is way cheaper than buying them. Things definetely do not make any sense in Greece.

  • Souvlaki

    They should try to restructure first but then again I don’t really have sympathy for people living in 300k-500k euro homes and not paying anything per month. On the topic of Greek real estate, it seems way over priced. Tiny apartments in Athens for sale at $350k Euro. You got to be kidding me. Nobody is going to go for that in 2013.

  • Alithia

    Why not? If you borrowed but can’t pay, what right do you have to keep it?

    Of course the Greek way is the old “to dikomou einai dikomou kai to kseno dikomou” (what is mine is mine and the foreign is mine too).

    It’s very easy in a widely self-entitled society to blame the banks for those loans, but I never heard of any guns used to get those loans. Now that they are comfortably sitting in those homes,, they don’t want to give them up. Too bad. So sad. Claims of “we are going to be on the streets” is a complete lie. They will be forced to move in with relatives or apartments, which they would be there to begin with if they did not have those homes.

    Plus were is the fairness? Some of us worked out butts off to buy our homes. So these guys who went for the fancy life they could ill afford should have nice homes based on……scamming and screaming?

  • ibid

    Ipes tin malakia sou. Pou kai pou les kai mia.

  • Tonto

    It’s a tough call but a necessary one. Every effort should be made by the banks to restructure loans in an equitable way for both parties. But still–29% of home loans are not being paid? Anyone else smell some opportunists here? A major effeort schuld be made to investigate each case to see if in fact the foreclosure is as a result of a job loss or business failure–as a result of this crises.

    But for those who are found to be ducking out and spending their mortgage payments on a new Jeep Cherokee–do like most Western countries that work on the concept of a profit margin, repossess, and sell at auction. I concur with some of the other comments that as Greeks, families will not let all these cases lead to more “street people.”

    The good life in Greece since the 1990’s included a lot of “funny business” (black and gray-market) sources of income. Now many have dried up. A helicopter flying over northern Attica can easily tell the tale–a lot of swimming pools and marble palaces. The entire community of Drafi–large, luxurious homes, was built just after the 2001 Greek stock market fiasco–by the parea of insider-trading profiteers. Many others lost their shirts.

    Taking out a home loan requires some real forthought about the future–like being able to pay it off, even under dire conditions. Though many of us will have difficulties–and still pay those fees–it is truly not fair to see others simply cease paying and keep what legally, after some point is no longer theirs.

    It’s all part of the hard lessons we now must endure as a result of a false reality painted to us by our lying politicians.

  • Alithia

    If you don’t like my opinion, you are free to argue against it.

    We use to be a society where you build as you earned. Like my grandfather did, like my father did, like I did. No “instant” gratification or entitlement life style by borrowing for what we couldn’t afford. Everybody I know up until a decade ago did it that way. Not anymore. borrow…and if yo can’t pay, too bad, it’s the banks fault.

    Let me know how if you have a clue what moral hazard means.

  • worldarts

    Yes, why not “take everything away” from the Greek homeowners, while the Bankers and PASOK & ND party who started this entire mess are rewarded for their bad management and blatant corruption!

  • worldarts

    Alithia….
    Then why doesn’t PASOK & ND set an example? Why don’t they return the 250 million Euros went that PASOK & ND Parties in “phony” bank loans from their Banker cronies, and never even paid a cent back after 10
    years?

    Is that a show of their good Governance and Gov’t Management skills?
    Into whose greedy dirty pockets did the millions of Euros go into?

    Why isn’t the Greek Justice System & Press asking any questions?
    No worry, come autum there will be a Greek march on Parliament who will throw these slimy, rotten Politicians out on their sorry butts!

  • worldarts

    Absolutely right, sir… the whole bailout thing was a fraud from the start to entrap Greece in massive Debt to rob its resources!

  • John

    They should investigate each case.

    People jumping to the conclusion that it’s a good thing your being ridiculous. What happens to the honest people who cannot pay their loans any more because the government created this mess, then hiked taxes and made huge wage cuts.. Now these people can’t pay their loans and it’s the peoples fault?

    Think before you have an opinion. You cannot kick families to the street and sell their homes when it’s your fault, most have had no option.

    Even if they sell them at auction, it doesn’t matter how much cheaper it Is nobody will buy it, who knows, maybe these families could buy their homes back for 10% of the price, don’t be surprised it doesn’t sell at all.

  • Alithia

    They cut some of the state funding that would allow them to pay the loans.

    SYRIZA also got state funding. Is that also going into Tsipras greedy dirty pockets?

    Reality is that political parties need money to run, including Syriza. Unless of course you want them to be funded by corporations.

    Day in and day out, Dean and I has explained to you the reason this has happened and yet, day in and day out, as a SYRIZA supporter, you don’t really want an answer. You copy and paste the same thing….and nobody cares.

  • Alithia

    ****What happens to the honest people who cannot pay their loans any more because the government created this mess***

    Populist ignorant nonsense.

    When Greece was borrowing money for public projects, nobody whined about the jobs created. Now that the well has run dry, the ignorant pop;ulist comments are that the “government did it”. Was there a junta in the last ten years that I didn’t notice? Because those politicians were ELECTED to their positions by the very same people that are now complaining.

    As for ‘kicking them in the streets”, what if they didn’t own the home to begin with? Would they not rent or live with relatives? Of course they would. There is no difference if they never had that home to begin with, but now, somehow, they have a “right” to own a home even if they can’t afford it….or never had the means to buy it to begin with.

    Amazing how victimhood and hypocrisy are joined at the hip.

  • Alithia

    Oh please, don’t point to any reality checks.

    EVERYBODY in Greece can play the role of a professional victim. Me included. We invented the word “victimhood”………and we really don’t want to hear anything about moral hazard.

  • Alithia

    ****Please remember, the European taxpayers had no say in the billions that the troika have paid in bailouts, & I think most would have prefered Greece to revert back to the Drachma. The bailouts were never intended to help Greece, they were to save a failed currency that was ill thought out by our “clever” masters in Brussels****

    BINGO…I was beginning to lose hope that only ignorance prevailed in here.

    I’m not sure how many time I repeated that Greece was an afterthought to her own bailout. If it wasn’t for German and French banks being on the line, along with the Euro itself, Greece would of been left to fend for itself. And it’s still going on.

    If I had a Euro for every time I heard some ignorant moron say that Greece “stole money” from the Europeans, I would be rich.

  • Alithia

    Fraud? Greece was ALREADY in debt and they restructured the loans. If they didn’t, she had to default.

    I’m not even sure how this can even be a discussion unless one is willfully ignorant or simply agenda biased argumentative.

  • ibid

    Sorry but these are different circumstances where’s people’s pensions, that they contributed to, are being stolen to pay for odious loans made by corrupt governments. This is not the same as what your grandfather did.

    Let me know if you have a clue about what human decency means.

  • ibid

    John made a very good point. It’s easy for you to talk as you are obviously well cashed up. Have a look in the mirror, I guarantee you won’t like what you see. Ise poli movoros.

  • Alithia

    Nonsense.

    1. People voted for those government.

    2. Pensions are already a joke in Greece. People don’t “deserve” to retire at early and mid fifties.

    3. Banks already lost a bundle lending to governments AND people. taht is why they need constant bailouts. If you don’t know that by now, you are too ignorent to learn.

    4. People can rent. NOBODY owes them a free house.

    5. The only time you think society is “civilized” is when you can steal as much as possible from somone else’s hard work.

    6. You’re not educated enough to know what “libertarian” is or use it in proper context. Even after I explained itto you.

    Typical gimme garbage from typical half educated gimme Greek.

    Don’t worry, you’re time is over.

  • Alithia

    The problem with all the excuses and entitlement rhetoric is that you can fool the foreigners, but you can’t fool another Greek.

    “giati na min exoumai kai emis oreo spiti” (why can’t we have a nice house) is nothing more then entitlement garbage. If they can’t afford that nice house, then RENT.

    And yes…from absolute poverty with chickens runnign in the house to well off….by workign like a dog. Try it.

  • ibid

    Is that right? O kyrios pou ta kserei olla? I am more educated than you think and I know you’re type. You know nothing about me. Nobody ever gave me anything. I have my own house separate from my parents. I moved out in my early 20’s. You are a miserable old man who only thinks of money and would not even share a crust of bread with anyone. You sound exactly like Scrooge from a Christmas Carol. You know that story? It suits you perfectly. Bah Humbug!

  • ibid

    You live in different circles than I do. None of my relatives ever said that. Sure the kids expect a lot from their parents such as accomodation, hartziliki etc but not from anyone else. Are you on the same planet or the same parallel universe as me? You are paranoid and I feel sorry for you.

  • Deep_Sea_Diver

    Thank you for agreeing with my comment, at least there are the two of us that realise the REAL truth of this massive debt induced “bailout”. 20,250 Euros for every man woman AND child living in Greece & the troika REALLY believed that Greece could finance this debt. Even a child of ten could work that out, but the child does not have the fat cat salary that the troika has

  • Deep_Sea_Diver

    Thank you for agreeing with my comment, there now seems to be three of us that realise the REAL truth of this massive debt induced “bailout”. 20,250 Euros for every man woman AND child living in Greece & the troika REALLY believed that Greece could finance this debt. Even a child of ten could work that out, but the child does not have the fat cat salary that the troika has

  • Alithia

    Scrooge? Thanks. Can I borrow some money from you? I have no intention of paying it back. I’ll hide behind my children and scream….”then exo, then plirono” (I don’t have, I don’t pay).

    If you are “educated” and not a xoriati (villager) screaming inane populist rhetoric, then you know what moral hazard means. If not, look it up, report back.

  • Alithia

    Oh please, you can never take the entitlement mentality out of Greeks.

    Unless you are 20 years old, you know very well that up to 10-15 years ago, Greeks rarely borrowed money to build a house. Then all of a sudden, everybody had to be “Evropaios” with a house and a Beemer. If you didn’t have the money, just borrow it.

    It’s over. The Beemer has to go and there is plenty of homes for rent.

    Signed.

    Mr. Scrooge

  • Alithia

    I may agree with you that Germans and Frnech bailed out their banks and the Euro, buit thart is as far as that goes.

    Greek populace is still responsible for the original loans. Crying out that it’s the banks ffault and corruption is nothing but entitlement bullcrap. In one area, people screamed for jobs….and now we have a quarter billion dollar highway that is COMPLETELY UNUSED. Not a single car or truck passes on it. Yet the same people whio worked in building it are now screaming that it’s “government waste”.

    It’s located south of Tripoli on the way to Sparta. Unless you are local, you wont even find it.

  • FreeForAll

    Free houses for everybody. Its not Greek pay their bills or what they owe.

  • majik23

    auction them off to whom? first, they deprived GReeks of their jobs, and now they will deprive them of their homes – m,aybe we should gas Greece altogether???

  • majik23

    Alithia, banks would lend money to anyone hoping to get them enslaved to them. if i don’t think somebody is going to repay me, what tells me to lend them any money? and banks did just that. now, the troika will bail out the banks and will drown the people – who will buy the houses they will foreclose? in the USA there’s c. 19 million houses foreclosed by banks standing empty, but the banks have to pay property tax on them and so on. Help the people, and the banks will thrive. put the banks first – you are on a spiral down to hell

  • majik23

    sorry, mate, but you sound a bit like a bankster yourself

  • sasha

    Houses lost..taken by the banks to be sold to germans/brits

  • SA

    Alithia

    You are such a self-righteous prick and possibly the most ignorant monkey!

    Greek people did not declare incomes and therefore did not pay taxes for decades. Who is at fault? Should the government not have rather focused on implementing a working taxation system in order to ensure payment of said taxes? No, because they were to busy plotting ways in which to pocket as much as possible. “Mr A, you owe 25,000 Euros to the taxman, I tell you what, give me 2,000 Euros and we’ll make the rest disappear”. Any citizen, in any country, will gladly not pay taxes, or at least the bare minimum, as long as their government lets them get away with it. Where are all the fat cats that owe millions of euros in outstanding taxes? Why are they not being vigorously chased to pay up? It isn’t as if they don’t know who they are – Perhaps it is a friend who had graciously donated a few hundred thousand euros to the political party’s bank balance.

    ***When Greece was borrowing money for public projects, nobody whined about the jobs created. Now that the well has run dry, the ignorant pop;ulist comments are that the “government did it”***

    Think (if you can) logically, why on earth would anybody whine about receiving work and a paycheck!? I mean, it sounds like you know all too well about hard work having lived with chickens? The real question here, is how much of the borrowed money allocated to the “public project” was actually spent on the project itself and how much was used to fund extravagant lifestyles by those controlling the funds? Somebody has to pay it back?

    ***As for ‘kicking them in the streets”, what if they didn’t own the home to begin with? Would they not rent or live with relatives? Of course they would. There is no difference if they never had that home to begin with, but now, somehow, they have a “right” to own a home even if they can’t afford it***

    ***Plus were is the fairness? Some of us worked out butts off to buy our homes. So these guys who went for the fancy life they could ill afford should have nice homes based on……scamming and screaming?***

    Really? Why not consider the reality (if you can, for a moment, put your pessimistic mindset aside): You’ve worked hard for a number of years, building up to the job you currently hold. You have some savings to pay a deposit and can now afford to purchase the home you have wanted to for you and your family; naturally, by taking out a mortgage loan (as 90% home purchasers do as not everyone has 300,000 euros lying around to pay cash) and can afford the repayments comfortably. Then, in a fantastic turn of the tide, your salary is halved! What “right” to own the home are you speaking of? Salaries have been halved (and more) and pensions cut as a result of “scamming and screaming” at government level; far from playing the victim.

    ***Reality is that political parties need money to run***

    …And where would you like for them to find this money? Oh wait, there are 9 million malakes they can screw! Sorry, my bad, didn’t think of that!

    Alithia, you are the worst example of a human being. Where is your humility and compassion? (two very important elements of being human – not that you can understand that). You choose to run down the Greek populace, your very own country. Loyalty? It seems you’ll support anything as long as it doesn’t affect you. Selfish? Just a little. Two-faced? Without a doubt! Inhumane? The epitome.

    There are people in this world that need to experience certain life events for themselves in order to understand, they cannot be told nor shown and you are just one of those. Perhaps in a sick twist, you and your family will get to feel the wrath of being a “victim”. Until then, keep on with your hugely distorted views.

  • john

    you are obviously stereotyping all greeks to be the same as the ones who only have themselves to blame. i agree alot of people in greece walked the red carpet and ate from the silver platter, and only have themselves to look to, even well before the crisis hit, however to summarise the whole case by labeling everyone to be in the same boat is outrageous..

    to blame the people because they voted for the government and now complain about the problems, what choices did they have? who is next to vote for? far right/left extremists? the communist party? voting for them would create so much more fear and uncertainty than the current idiots left to vote for, but im sure you know that deep down, its the same with any country really, its always the same 2-3 political parties in control regardless, vote for the cruel man in a suit, than the nice man holding a knife. Greece has always stood up and protested intensely against them when things are not right.

    why would people whine about the jobs created with the money the government didnt deserve? did the whole country receive the financial situation of greece in the mail? were they notified about the dodgy loans banks happily gave them which would obviously create turmoil? did the prime minister announce how corruption was winning in greece?

    now about “kicking them in the streets” the problem is more delicate than you insult it to be. People who had government jobs fairly received loans based on their income.. The government drives the country into disaster, cuts their income, +taxes, now a family of 5 should join the homeless or coup up with their cousins who typically live in a 2 bedroom apartment like the majority of europe do? i understand to attack the guilty and selfish greeks who dont deserve any sympathy, but a crisis is a crisis and should be looked at carefully.,. now the government says it will do the same as i stated from the beginning, to look at each case separately.

    i have family in greece whos business went from comfortable to getting 2 customers over a 16 hour day because of the crisis. The kids obviously found other jobs, 20 euro a day for 12 hour shifts “take it or leave it”, eating potatoes and salad for dinner etc etc.. you should be ashamed of yourself attacking all greeks even the hardworking, honest ones who dont deserve misery while greek politicians continue to get arrested for corruption to this day, with millions in swiss accounts for agreeing unaffordable contracts, theft, mismanaging the country, poor governance etc etc.. your just a fucking idiot

  • That’s too bad, I wish people could stay in their homes.

    Snow
    Removal Calgary

  • Ok, so they allowed the international lenders to force them to foreclose, so what do you do with the sudden increase of homeless families and the increase in health issues?

  • 68040

    They should be seizing the assets of the French and German Banks to “pay creditors”. When Iceland gave the foreign banks the middle finger instead of taking it out on the Icelandic public the creditors of the banks that went insolvent outside Iceland had their assets taken. Let the failed banks pay for the losses with their own assets and not the people who would lose.