Outrage in Greece as 700,000 properties are at high risk of auction

greece home auctions

Greece’s Supreme Court (Areios Pagos) on Feb. 9 ruled that loan management companies- known as servicers, can conduct auctions on behalf of “funds” that have bought packages of non-performing loans in the country. According to Greek media reports, this means that 700,000 properties are at risk while within three years it is estimated that around 150,000 houses will be auctioned electronically at a price below their value.

The decision was issued in an unprecedented speed for Greece’s justice, in just two weeks after the prosecutor’s proposal with 56 judges voted in favor and only 9 against it. Hours after the decision, opposition parties, lawyers and borrowers expressed sharp criticism to the Supreme Court and the government.

Servicers responded to criticism. The Association of Management Companies (EEDADP) said in an announcement that their top priority was to find mutually accepted and sustainable solutions for the repayment of outstanding debt. Particularly for vulnerable households, no one is at risk of being kicked out of their primary residence since the law imposes a freezing on any legal action after their inclusion in the Intermediate Program of Law 4916/2022, they added.

The number of properties used as collateral for non-performing loans amounts to 600,000, but only 50% of them concern residential assets, while the remaining 50% concern other categories of real estate (industrial or other commercial real estate, warehouses, parking lots etc), according to EEDADP data.

They also noted that “auctions are always the last resort in a collection process” after all previous efforts have been exhausted and on condition that a borrower refused to repay their debt.

The latest developments come at a politically sensitive time, just a few months before the national elections.

UPDATE 19/02/2023 14:11

Greek Minister of Finance, Christos Staikouras, during a TV interview on Sunday (Febr. 19), spoke among other things about auctions and the protection of the first home, saying “it is the responsibility of servicers to assess current reality and regulate better”. Regarding the assistance to vulnerable households the Minister of Finance said that “today there is a platform to save the homes of vulnerable households, 17,000 households have entered, we pay them up to 250 euros per month.”