A borrower offers for sale real estate property with a total valuation of 700,000 euros that corresponds to the financial claim of servicers, which, however, is not accepted by the creditor.
His refusal is not recorded anywhere and the servicer proceeds with an auction of real estate property carrying a nominal value of 5 million euros.
Yet under the new legal framework voted yesterday, November 5, by the Hellenic Parliament, the servicer will be obligated to respond in writing to the proposed settlement within 3 months and must conclude the procedure within six months.
At the same time, the servicer will face the threat of a 5 million euro fine whenever the creditor or servicer disregards the settlement request of the borrower or fails to provide itemized figures for the total amount of the obligation, which must detail both principal debt and interest.
Furthermore, establishing the 15% advance payment on the outstanding loan balance may be characterized as high in percentage terms, but it constitutes a firm limit, whereas until recently servicers demanded whatever they pleased.
«You owe us», servicers said until yesterday
Until recently, servicers provided information to the borrower about the remaining balance of the debt with a single SMS and then vanished, so that when the interested debtor attempted to speak with a representative, it was impossible despite frantic efforts.
The 5 million euro fine bothers them...
Until yesterday, servicers possessed only rights, whereas with the passage of the bill they also assume obligations. The 5 million euro fine apparently unsettled the servicers. Characteristically, a press release issued by the board of directors of the Association of Loan and Credit Servicing Companies (EDADP) pointed out that the new framework is respected, yet stands among the strictest across sectors of the Greek Economy.
Foreclosures were more frequent prior to 2010
According to data from ELSTAT in the Notarial Activities category, in 2009 there were 28,089 foreclosures and 5,181 auctions.
At the end of 2024, there were 15,180 foreclosures and 9,635 auctions. From 2011 onward, foreclosures declined to 11,875 and auctions approached 3,000. From 2012 onward, a declining trajectory is observed, with 2016 settling at 2,200.
Foreclosures climbed above 14,000 in 2022, as was also the case in 2023 and 2024, but did not reach the levels of 2009.
It should be noted that the e-auction website, where auctions are held, displays a total count of 420,204 from 2017 when the platform was created until today, while 11,419 have been scheduled. The 420,204 figure includes auction suspensions and fruitless auctions that are reintroduced, whereas data from ELSTAT refer to auctions completed within a single calendar year.
Nikos Theodoropoulos
ntheo@bankingnews.gr
www.bankingnews.gr
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