Print Edition - 2017-06-26 | MONEY
Greece takes home foreclosures online to avoid protests
- property auctions
Jun 26, 2017-
The scene has become familiar in Greece in recent months—a middle-aged woman in a courthouse, trying to dodge an angry crowd shouting inches from her face.
“Get out, crow!” is the usual cry at notaries—in most cases women—seeking to carry out court-mandated property auctions. “Not a single home in bankers’ hands!”
A tacit ban on thousands of property foreclosures in Greece, stalling sales for years, is now under threat as cash-strapped banks and social insurance funds start to turn the screws on borrowers. And to escape obstruction by anti-eviction groups, the auctions will be taken online with the blessing of Greece’s EU-IMF creditors.
“It will be like eBay,” warns Victor Tsiafoutis, a lawyer helping debtors on behalf of Greek consumer group Ekpizo.
“Everything is being done to facilitate foreclosures... it’s all done for the banks,” he lamented. From September, a custom-made platform will enable some 15,000 properties including homes to go under the hammer electronically, says Georgios Rouskas, head of Greece’s notary associations.
“There are court rulings covering these foreclosures... instead of doing it in court, it will be done on an electronic platform.”
In recent months, notaries have played a cat-and-mouse game with anti-eviction activists, who arrive in force to prevent property auctions from taking place. On a regular basis, members of leftist groups—including hardline former ministers of Prime Minister Alexis Tsipras—interrupt the proceedings and escort notaries out of court offices, in full view of the police.
After several run-ins, the notaries in October decided to abstain from all but the most pressing auction cases. They ended their protest on Friday.
“We had become a punching bag,” says Rouskas. “Foreclosures were never easy to accept... (but) in the past year the problem has become acute.”
The notaries insist that the repossessions are not targeting the poor—in most cases, properties to go under the hammer are worth over 300,000 euros.
Formerly loose with questionable loans to not only the public, but also political parties and prominent media groups, Greek banks are now loaded with bad debt. From 2011 onwards, if property auctions had been allowed to proceed unhindered, the number of foreclosures stemming from mortgages would have doubled, the notaries say.
Those related to business loans would have tripled, while those linked to consumer loans would have quadrupled. In 2010, at the outset of Greece’s seven-year economic crisis, a law was passed to protect family homes from debt seizure. For years to come,
private and state creditors refrained from aggressively pursuing foreclosures, even after court rulings, as the country sank deeper into recession.
Bank staff privately admit that mass foreclosures would also have been impractical in a country with a near-dead property market, as they would have found it hard to sell on the houses they seized. But this has led to wealthy debtors playing the system to their advantage, Rouskas argues, by using the auction moratorium to avoid having their assets taken and sold.
“We are asked to stop all auctions, be it a warehouse, a factory, a villa, a hotel or a ship... anything that can be called ‘people’s’ property.” In the online auction platform, which was prepared with advice from EU-IMF technical experts, participation is open to all bidders, Greek or foreign.
Tsiafoutis says the move “may benefit foreign funds and investors (as) there is no liquidity (in Greece).”
On June 15, masked anarchists smashed the front entrance of Newsphone Hellas and threw paint in the lobby. Rouskas says notaries are not intimidated. “Notaries have always held auctions in public. We are not scared. Most people recognise our contribution (in delaying unfair auctions).” But others in the profession are not as sanguine.
“Why should I get beaten up because someone didn’t settle their debt on time?” says another notary, speaking on condition of anonymity.
Published: 26-06-2017 09:06