Filenews 13 August 2023 - by Eleftheria Paizanou
The technocrats of the Ministry of Finance are writing and erasing in order to prepare the legislative proposals for which the competent minister Makis Keravnos committed to the coalition parties with the aim of finding a definitive solution to the foreclosures before the end of October.
This is because the moratorium on foreclosures decided by banks and credit acquiring companies expires.
According to F's information, the efforts of the Ministry of Finance are focused on a comprehensive formula that will holistically address the problem of foreclosures and non-performing loans.
Of course, it aims for the new regulations to be balanced, so that borrowers are protected on the one hand and financial and fiscal stability and the country's creditworthiness are not affected on the other.
Last month, shortly before the crucial plenary session of the Parliament, the parties supporting the government, namely DIKO, EDEK and DEA, in an effort to convince some of their MPs who, despite government announcements, had strong reservations, had demanded the implementation of a series of proposals that would protect borrowers.
In an effort to prevent the approval of the controversial bill proposed by AKEL, ELAM, EDEK, DPA, ECOLOGISTS and three DIKO MPs, which would have suspended mortgage auctions through the issuance of a decree by the court to set aside the sale, the co-governing parties had agreed to create an alternative extrajudicial mechanism.
In particular, a mechanism will be established through the expansion of the responsibilities of the Financial Commissioner, so as to increase the number of beneficiaries who will be able to submit complaints to the Financial Dispute Resolution Body.
In fact, the parties of the coalition government had received the written commitment of the finance minister that he would examine their proposals.
It is worth noting that in the end the controversial proposal was voted down by the majority of the Plenary of the Parliament, however, the co-governing parties secured the commitments of the Government, something they sought to be consistent with the commitments to their voters.
Party demands
The parties of the coalition government, in the context of the implementation of the alternative extrajudicial mechanism, had demanded the implementation of eight proposals concerning the following:
• Expansion of the responsibilities of the Financial Commissioner. Continue to strengthen the Office with human resources, upgrade its staff and digitalize procedures.
• Broadening the conditions for submitting complaints to the Office of the Financial Ombudsman to allow complaints about illegal charges and/or unfair terms or any other type of illegal charges.
• Broadening the scope of the Financial Ombudsman mediation process, so that it is used by a larger number of citizens for the purpose of restructuring non-performing and performing loans.
• Out-of-court confirmation of a loan, in conjunction with the amendment voted last week to the Real Estate Transfers and Mortgages Law, which obliges the creditor to send with letter "I", a confirmation of the balance of the loan from an independent consultant, the cost of which will be borne by the creditor.
• Regulation of the possibility of using the decision of the Financial Ombudsman in judicial proceedings in the form of testimony, both within the court of special jurisdiction and any other jurisdiction.
• Improvement of the bill concerning the establishment of a Special Department for the Resolution of Financial Disputes in the District Courts, which will hear in a short period of time the appeals of borrowers who disagree with over-indebtedness.
• Re-announcement of the Estia Scheme, adapted to the current data and the implementation of the Rent for Instalment Scheme.
Difficult task
Therefore, in the midst of the summer holidays, technocrats are trying to translate party proposals into bills, while at the same time they are proceeding with economic impact studies to see how much their implementation will affect the economy.
A competent source told "F" that it is not an easy task to prepare the new legislation, as they must be prepared in tight deadlines.
As we have been told, the law of the Body for the Extrajudicial Settlement of Financial Disputes is being examined, so that there are the necessary amendments to it so that the demands of the parties can be implemented.
At the same time, finance ministry officials want to ensure that bills submitted to parliament do not face legal or constitutional obstacles.
In addition, the provisions of the Estia Scheme are being examined, so that it can be expanded and so that more borrowers have the opportunity to join it.
In addition, the simplification of the application process is being studied, as well as the reduction of the relevant certificates and attestations that applicants must provide.
As is well known, the first Estia Plan failed, as around 1,150 applications corresponding to bad loans amounting to approximately €270 million had been approved, although initially the competent Ministry estimated that €3.4 billion of bad loans were included.
For those who have joined the Estia Scheme, the state pays 1/3 of the instalments of the restructured loan, while the interest rate is low.
At the same time, the procedures for the implementation of the Rent for Instalment Scheme are running.
In September, the Ministry of Finance will issue an invitation to banks and credit acquiring companies to participate in the scheme, while next month the submission of applications by borrowers will begin.
Will Parliament request information from the Minister of Finance?
In September, when the parliamentary finance committee resumes, MPs will demand to be informed by the finance minister about the new planning he is considering.
Parliamentary sources told F that the general issue of foreclosures is one of the first to be examined by the committee.
The bill on special jurisdiction, known as the Court of Foreclosures, is also pending before the committee, which will deal with disputes over the sale of mortgaged property, which is a credit facility.
The improvements requested by the majority of parties will relate to the timing of the hearing of cases and the issue of not suspending the sale.
The finance ministry did not include the timing of foreclosure cases, as it is unconstitutional, while foreclosures would not be suspended as it would affect the economy and the banking system.
The draft law of the co-government concerning the Central Bank Mechanism will also be put before the committee.
Specifically, borrowers who have as collateral their main residence, worth up to €350,000, will be able to go to court and file an application to set aside the notice of the intended sale, within 21 days from the date of receipt of the letter.
