The Finance Ministry is eyeing important changes in the insolvency framework as it looks for more effective ways to deal with bad payers and tackle the mountain of non-performing loans.
According to a letter sent to political parties by the Finance Minister the following changes are on the cards:
– Introduction of online real estate auctions.
– Banks to be allowed to sell a mortgaged property at 50% of the reserve price if it is not sold at the first auction at a price of 80% of the reserve price.
Afterwards, the Bank is given the right to purchase the property at market value as determined in the first auction or on the basis of a new valuation
– In the case of the auction of a property which is a principal residence, if the borrower has received state funding as a contribution to his debts he ceases to have a privileged status with regard to the last tenderer.
– A framework for quick extrajudicial recovery of collateral by secured creditors will be created in order to avoid future accumulation of non-performing loans.
– Legislation facilitating the sale of loans will be introduced.
– Investment funds that buy loans will be able to access the borrower’s data to the extent necessary to enable them to carry out their assessment.