About 4,300 houses, of which 3,100 worth up to 100,000 euros each, are planned to be auctioned over the next 7 months. While there is no data on the e-auction platform as to how many of these 4,300 properties are first homes, the low starting price of the auction, i.e. less than €100,000 for 3,100 of them, suggests that these are low value properties. The list of auctions is updated daily with new objects, as pressure increases from both banks and funds to liquidate assets from bad loans accumulated during the previous financial crisis.

There are now two opportunities to protect the first residence after the expiration of the Katseli law and the entry into force of the new bankruptcy law in 2020 and provide for:

• Either joining an out-of-court debt settlement mechanism through an electronic platform that provides a standardized solution based on a single algorithm.

• Either the transfer of property by the borrower to a real estate purchase and leaseback entity when it is established around the end of 2023.

Anyone who joins the organization, in addition to agreeing to the surrender of property in exchange for continuing to live in it on terms of employment, also acquires the right to subsidies from the state. However, to do this, he must be vulnerable on the basis of specific income and property characteristics, as provided by law. The main criteria are income between 7,000 and 21,000 euros, depending on protected members, real estate does not exceed 120,000 euros (up to 180,000 euros with protected members), and deposits do not exceed the limit of 7,000 euros. (increased by 3500 euros for each additional family member). Thus, first home protection is now subject to strict conditions and only applies to those households that are considered vulnerable based on statutory criteria.

In the next seven months, 4,300 houses will be auctioned.

The platform for someone to be certified as vulnerable has been open since 2021 and, according to K, to date, only 763 debtors have confirmed their “characteristic” as vulnerable. Those who have expressed interest in joining the state subsidy program (the so-called interim program), and then to the body for the acquisition and re-lease of real estate, today can be counted on the fingers. The number, according to the latest available data, is just 10, and while the platform will remain open until the carrier is operational, interest is currently low. These borrowers agree in advance to surrender their property to the institution when it is established, and the low participation rate indicates the reluctance of even the most vulnerable households to accept the loss of their first home.

It is recalled that the amount of the subsidy starts from 70 euros and goes up to 210 euros depending on the protected members and will be valid for the entire duration of the temporary program, as well as for continuation, that is, when the organization is created and operates. These households will lease their first home from the agency for 12 years, and at the end of the 12-year period, borrowers will have exclusive first-time purchase rights to buy the home once they have recovered financially. The acquisition will be made at the commercial value that the property will have at the end of the time period.

Bank executives explain the low interest in joining the organization by the fact that a significant number of borrowers have already secured their first place of residence under the Katseli law. The Katseli law, despite the unevenness of arrears and their circumvention in some cases by strategic defaulters, has been in place for more than 10 years and offered strong protection to the most vulnerable households, allowing them to pay off their mortgages, consumer loans and cards and protect their first home from an auction, returning 80 % of its value on favorable terms.

The low interest in participating in the new regime suggests a break with first-house ownership, an element that legal circles believe undermines the success of the new institution and establishment of the institution. While the 4 funds (Bain Capital Credit, Christofferson, Fortress Credit, Kaican Hellas Association of Companies – Beaumont Summit Financial DAC and LCM Capital) that have entered into the Expression of Interest process have confirmed their participation in the competitive dialogue that will follow in the coming period with the Treasury, to determine the final terms of the competition, a reflection of the success of the new institution is widespread.

This concern is expressed by representatives of the funds who have expressed interest, essentially pointing out that the limited interest on the part of the debtors does not justify the investment project. It should be noted that the initial expectations determined the amount of funds that could be invested for the operation of the institution up to 2 billion euros, an amount that is no longer confirmed by the interest of borrowers wishing to provide their first residence. From the Treasury side, they note that the agency is not a piecemeal solution with a limited duration, but a long-term project that provides first housing for vulnerable households and therefore will be evaluated over time.