Thousands of bad mortgage loans in Greece could see part of the debt written off as banks try to evaluate how much debtors can actually repay.
According to Greek newspaper Kathimerini, almost 50 percent of these loans qualify for long-term settlement status where evaluations will determine how much of the loan can is non-viable.
The report claims there is €21.1 billion ($26.1 billion) in bad mortgages and around 40 percent of these qualify for some form of long-term settlement.
Non-viable sections of these loans will be written off when the rest is repaid.
The issue is particularly sensitive in Greece, which has almost half of the eurozone’s non-performing bank loans (NPLs)
A report last month claimed NPLs are a constant threat to the eurozone’s banking system and research by the European Commission showed Greek institutions own almost half of them.
According to data released by the EU Commission and the European Central Bank (ECB), the non-performing loans quotas in Europe are falling steadily in relation to all the loans granted, but their performance in Greece is alarming.
In Greece, the NPL rate has fallen within 12 months from 47.2 percent to 46.9 percent, but it is by far the highest performance in the eurozone, meaning that almost half of the EU’s NPLs belong to Greek banks.
The issue of property auctions has also caused political pain for the Greek government, with international creditors’ insistence on seeing through foreclosures.