The specter of a resumption of previously suspended auctions of foreclosed residences in the country -- with liens held either by the state or banks -- looms as a significant “political headache” for the leftist Greek government in the coming period.
Recently passed legislation in Parliament opens the way for such foreclosures and court-ordered auctions, although the leitmotif on the government’s side is that the provision deals with “villas and luxury homes of wealthy dead-beats and real estate belonging to bankrupt companies.”
The prospect of renewed auctions of foreclosed homes, a process that was suspended by the previous Samaras government and periodically renewed by the current Tsipras administration, generated heated criticism over the last few days by the political opposition. Moreover, protesters affiliated with the out-of-Parliament left gathered outside courtrooms in Athens and Thessaloniki and blocked the procedure on at least two occasions last week.
Nevertheless, the argument that only high-end property held by wealthy holders with arrears to the state or outstanding mortgages are at risk comes amid a report that eight working-class apartments in the western Thessaloniki district will go on the auction block on Oct. 19, due to debts to the tax bureau.
Market analysts estimate that up to 5,000 residences may also go up for auction by the end of the year, a prospect that entails a major political risk for the leftist government, given that it rode to power in January 2015 on a wave of promises to end memorandum-mandated austerity, of which protection of primary residences from creditors was a center-piece pledge.
Along those lines, a MP from the small rightist-populist party in a coalition with leftist SYRIZA, Dimitris Kammenos, last week tabled an amendment to allow borrowers the right to purchase their own loan from a bank before it is sold off to a distress fund, as part of whatever portfolios of non-performing loans in the country.
The amendment foresees the principle of equal treatment of borrowers with distress funds, as well as a 30-day period in which the borrower can purchase the loan.
In a circular issued last week by the general secretariat for public revenues, the process by which properties can be foreclosed and auctioned off for debt to the state is outlined.
One of the primary provisions is that a first bid cannot be less than the total sum owed or less than 50 percent of the value of the property, based on objective tax criteria used by the state to tax real estate.
