By N. Malliara
[email protected]
The first mass circulated payment orders, corresponding to demands worth four billion euros, will be sent next month to borrowers in Greece holding non-serviced bank loans, according to reports.
Thousands of borrowers in the country will be among the first wave of a legal "blitzkrieg" by Greece's systemic lenders to reduce an "Olympus-sized" mountain of NPLs and NPEs in the country, a situation that is increasingly asphyxiating the fragile and thrice recapitalized Greek banking sector. Reducing bad debt is also a standing memorandum demand and something repeatedly cited by institutional creditors.
The first payment orders deal with terminated loan contracts dating from early 2017, and are accompanied by the threat of asset foreclosures.
For instance, the holders of outstanding mortgages - who lack court-ordered protection under a law for primary residences - will face the possibility of foreclosure of the property and its subsequent auctioning off; the holders of long-overdue consumer loans could face a probe on whether they have property assets than can be seized as collateral.
The worrying trend, for Greece's lenders, worsened after the summer, as new "bad debts" mushroomed on banks' ledgers. Following pressure by the ECB's Single Supervisory Mechanism (SSM), banks are now terminating contracts for non-serviced loans and seeking legal action after 210 days of payment delay, down from the previous 360 days.
