Mortgage loan

Apartment owners in central Athens and other parts of the Greek capital are ready to make the most of the increase in demand - mainly from foreign visitors - given that most people seeking a new home want to rent rather than buy.

Demand for loans kept declining in the first quarter of the year, for the fifth quarter in a row, reflecting the deficits in investment and consumer confidence and the impact of major delays and postponements in the completion of significant investment moves such as the Elliniko development in southern Athens.

All debts to banks and the state will be able to enter the extrajudicial settlement mechanism the Economy Ministry has prepared for voting by Parliament, with the exception of the social security contributions that workers owe.

The Hellenic Bank Association is asking for changes to the bill on the extrajudicial settlement of debts to lenders, warning it could turn into a refuge for strategic defaulters.

Bank officials note that unless some modifications are made the new mechanism will torpedo the effort to reduce nonperforming loans, which would have dramatic consequences on the banks' capital base.

Spending on rent, mortgage payments and utility bills will not count toward the sum of card or e-banking payments taxpayers have to reach to be eligible for a tax discount of 1,900-2,100 euros per year, according to Finance Ministry officials.

The Finance Ministry will take steps to avert the creation of mortgage loan and household debt bubbles in the future. According to a bill it has prepared that incorporates a 2014 European Directive into Greek legislation, the ministry is setting rules for the proper and timely information of consumers who intend to take out a housing loan.

The New York Times published piece on the ordeal Greek homeowners experience during the process of foreclosures on their properties. The newspaper’s contributor, Niki Kitsantonis conveys the horrifying realities of ordinary people in an article entitled “Greek Homeowners Scramble as Repossession Looms: ‘It’s Like a Horror Movie”.

Loans that local banks have issued since 2011 are showing exceptionally low rates of payment delays. This concerns loans to both households and corporations, and comes despite the fact that economic conditions have deteriorated and the economy remains in contraction.

The Greek and international banking systems are "safe" and tools are in place to protect them from any impact from the crisis engulfing Deutsche Bank, Greek central bank chief Yannis Stournaras said on Friday.

Banks say they may go as far as forgiving part of mortgages in an effort to make it easier for borrowers to pay off their debts and for banks to avoid losses from selling their loan portfolios to funds. Haircuts on mortgage loans have never been an option until now.