(Greece) – Sources at Greece’s Economic Ministry have confirmed an agreement between Greece and its lenders concerning the country’s NPL’s, or nonperforming loans. According to the International Monetary Fund, Greece leads the Eurozone in the number of nonperforming loans it has. In the Eurozone, the number of “bad loans” totals around 900 Billion Euros, with 100 Billion Euros of this existing in Greece alone. To put this into perspective, the Greek economy makes up only 1.5 per cent of the Eurozone, but their amount of NPL’s totals 11 per cent. Talks concerning what to do about these NPL’s are part of the current bailout negotiations. One of the main concerns has been how to prevent people from losing their homes.
Over the weekend, Greece came to an agreement with its creditors concerning the sale of these nonperforming loans. According to the Economic Ministry, the majority of these NPL’s will be protected from sale until 2018, giving homeowners a greater chance to keep their homes. Primary residences that have a taxable value of under 140,000 Euros will be protected. The Economic Ministry officials have also said that the sale of overdue bank loans from the distressed debt fund has also been agreed upon. It has been largely accepted that these negotiations were necessary to help conclude the current bailout reviews.
The Economic Ministry also explained that income will not be a factor when it comes to deciding on which primary residences that are backed by nonperforming loans will be excluded from sale. The only criteria will remain that homes with a value under 140,000 Euros will be protected. This essentially means that 94% of homes will be exempt from sale until 2018. They also explained that in the case where homeowners have loans that are being sold by the banks, they will not have to deal with any changes. However, these organizations will use debt collection agencies that are both registered in Greece and also licensed by the Bank of Greece.