Compromise reached on protection of borrowers

The government and Greece’s systemic banks reached an agreement on Thursday on the protection of debtors’ primary residences, which will require the approval of the country’s creditors – especially the European Central Bank.

The main aspects of the compromise achieved are that the banks accepted that borrowers who have already secured protection thanks to the Katseli law will not have to be transferred to the online platform that will be created, and that the overhaul of the Katseli law will allow for the new platform to gradually start operating as an efficient out-of-court settlement mechanism.

In return, banks have secured that the government will consider blocking any application for protection just before the debtor’s property is auctioned – a common practice by strategic defaulters – and banning the amendment of the asking price during the auction process unless the borrower produces a report by an independent surveyor that would certify the review of the price.