Filenews 9 October 2022 - by Eleftheria Paizanou
The opposition parties are again thinking of giving a few months' extension to the freeze on foreclosures, as in 22 days the suspension of the law approved by the majority of the Parliament last July expires.
Specifically, on October 31 the suspension of the law expires and MPs of the opposition parties began contacts to follow up on the freeze. The opposition, shielded by the Supreme Court's ruling, which ruled that last year's targeted suspension of foreclosure legislation was constitutional, put proposals on the table in relation to the length of the measure's freeze. The suggestion that the suspension of auctions should continue until the end of February or March seems to be gaining ground. This is because, in the run-up to the presidential elections, there will be no work in Parliament from mid-December to the end of February.
However, the opposition is considering moving on the same perimeter of the law, that is, the suspension should concern a main residence worth up to €350,000, a business premises that has an annual turnover of €750,000 and parcels of land worth €100,000. Of interest will be the stance taken by DISY, which on the eve of the 2021 parliamentary elections had advocated the freeze. At that time, in fact, the proposal approved was particularly expanded, as it was applied for a main residence worth €500,000, for a business premises with an annual turnover of €2 million. and 10 employees and for plots of land of €250,000. In their statements, the MPs of DISY had argued that they were in favour of the legislation in order to avoid the approval of the other 13 bills concerning amendments to the legal framework for foreclosures and the proposal for a law on the establishment and operation of the foreclosure court. As they had stated, the proposal adopted would have the least impact, compared to the other bills.
Foreclosure Court
The issue of the Foreclosure Court came to the fore again last June, when the two bills concerning loan servicing companies, which were linked to the disbursement of the €85 million, were being discussed. from the Recovery Fund. After the two bills went through a thousand myriad waves, they were finally approved, as a result of which the country submitted a request to the Commission to receive the money from the EU. The response of the European Commission is expected soon, which will take a position on whether the legislation is in line with the commitments given by the Republic in the context of the actions it has undertaken to fulfil by the end of 2026, in the context of the implementation of the Recovery Plan. It is reminded that the Republic, through the Recovery Fund, is expected to receive a total amount of €1.2 billion. The two bills on loan servicers, the Foreclosure Court Bill, as well as the Evidence Bill, will complete the puzzle in dealing with bad loans and improving the legal framework. In relation to the bill for the Foreclosure Court, a competent source told "F" that the final text of the bill has not yet been finalized. During the summer, there were consultations between the parties involved.
There is little time left
Although the government's goals were to submit and approve the bill for the Foreclosure Court before the presidential elections, this seems likely not to be possible. This is because when the final text of the bill is finalized, it will be sent for legislative scrutiny to the Legal Service and then it will have to be approved by the Council of Ministers and then it will be submitted to the Parliament. In fact, there are about two months left before the closure of Parliament due to the elections and it is likely to be tabled in the new year. The foreclosure court was intermittently a prerequisite for the adoption of important pieces of legislation. The first time was the state budget of 2021, and the second time the bills concerning loan servicing companies. Initially, the bill was submitted in January 2019 and in April 2021 the government withdrew it, as due to the amendments of the parties, the general philosophy of the government proposal was changed. With the new bill being prepared, a special jurisdiction will be created at the level of the District Court, which will examine disputes in relation to credit facilities between borrower and creditor.
The court will deal, in addition to disputes relating to the debit balance of the credit facility, and any other dispute over credit facilities, guarantees and collateral. In other words, it will also deal with disputes in relation to over-indebtedness and unfair terms. These arrangements will cover first-time debtors, guarantors and collateral providers, who have secured the loan they received the main residence, with an estimated value not exceeding €350,000. In addition, it will also examine disputes concerning the sale of mortgage property, which is collateral, as well as disputes regarding the securities of credit institutions acquired between 2008 and March 2013. Applications and appeals registered with the District Court will be examined and completed within 60 days from the day of their registration.
The Bill on Proof was waiting for him
The Bill on Receipts, by which loan servicing companies and non-credit institutions will have access to the books of banks, to facilitate the continuation of lawsuits against borrowers, has been pending in the Parliamentary Committee on Legal Affairs since March 2020. It was initially to be discussed in the Finance Committee, then sent to the Committee on Legal Affairs, although a few months ago there was a suggestion that it be re-examined by the Finance Committee, which was not implemented. Today, banks, after selling loans to credit-acquiring companies, also give them bank books. However, under the current legislation, loan servicing companies do not have the ability to deposit these books in the courts, as banks do. This is regulated through this bill.
The bill aims to include in the special regulations regarding the admissibility, for the purposes of testimony, of entries in bank books, in addition to credit institutions and other loan purchasers such as credit acquiring companies. Based on data received from KEDIPES, 2,936 cases of total portfolio, amounting to €648.6 million, for which the hearing procedure has not begun, are pending before the Court of Justice. In fact, in many cases there is no evidence of disbursement of the loans, the presentation of which would be the alternative to proving the case. As we have been told, as soon as the members of the Committee on Legal Affairs have completed their remaining outstanding issues, the bill will be put back before the competent parliamentary committee.
POINT OF VIEW
Improvement rather than dismantling
The opposition parties will not be wrong to complain about the delay in tabling the bill concerning the Foreclosure Court. Some, in fact, will not hesitate to use it as a lever of pressure to give their positive vote to the state budget. Against this background, we should not be surprised if the bill is tabled by the end of the year. However, with the total freeze on foreclosures, parliament protects not only vulnerable groups of the population but also strategic defaulters. It would be more appropriate to improve the legal framework for foreclosures than to freeze once again.
