Greece’s coalition leaders said they will allow banks to confiscate 12,000-15,000 homes because they believe the owners have been trying to manipulate laws that protect people with primary residences worth up to 200,000 euros ($260,000) from losing them because they claim not to be able to afford the mortgage.
Prime Minister and New Democracy Conservative leader Antonis Samaras and his partner, PASOK Socialist leader/Deputy Prime Minister/Foreign Minister Evangelos Venizelos said they are moving to satisfy the demands of international lenders and banks to start foreclosing on homes and lift a prohibition when it expires at the end of the year.
“The main residences of socially vulnerable citizens and those who cannot pay their loans because of the crisis will be totally protected,” said Samaras after the meeting, without revealing details of what the government is planning. “This is not under negotiation, period.”
Venizelos said only a few people would be affected by the decision – some 98 percent of people who can’t pay their mortgages are still expected to be exempted – although he didn’t say how that would help the banks balance their loan sheets sufficiently.
“The information I have shows that there is not a problem,” he said. “There are very few tricksters, who without really being vulnerable have hidden behind those who need protection,” said the PASOK leader.
The two are trying to head off a growing rebellion in their parties against the idea of allowing banks to take the homes of people who can’t afford to pay because of pay cuts, tax hikes, slashed pensions and the coming transfer or firing of as many as 40,000 civil servants.
The government has set aside a bill that would allow indebted households to restructure their loans, which many banks have refused to do, resulting in nearly one-fourth of mortgages going into default.
There was no word from Samaras and Venizelos on why their two parties, who owe banks 250 million euros ($333.9 million) aren’t paying what they owe. The banks, who depend on the government for 50 billion euros ($65 billion) in recapitalization funds, aren’t trying to collect.
The only collateral they put up, however, was not their party headquarters or properties but future monies they are allowed to take out of the public coffers to fund their operations. Despite that, many of their party workers are unpaid and PASOK reportedly hasn’t paid its rent in several years.
The moratorium on foreclosures began in 2009 as Greece was beginning a crushing economic crisis and getting the first of a series of $325 billion in two bailout loan packages from international lenders and has been renewed annually since. That practice will now stop, said Samaras, meeting the directives of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).
Under the plans discussed at the meeting, in which Finance Minister Yannis Stournaras and Development Minister Costis Hatzidakis took part, only 2 percent of homeowners who have been protected from repossessions so far would be affected by the change, it was said.
Sources told Kathimerini that in cooperation with Greek banks, the Finance Ministry will be able to pinpoint which homeowners have been taking advantage of the moratorium by splitting larger mortgages into ones that are smaller than 200,000 euros and into other types of loans in order to avoid having their property seized. The ministry will also check on what deposits homeowners have and whether they are genuinely unable to meet their monthly repayments.