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Banks to push for a restart of RE auctions

Banks in Greece ask the government to restart real estate auctions in October. The auctions have been “frozen” due to COVID-19 pandemic.

The restart of auctions is considered crucial in view of the securitizations that are planned and which need a clear regulatory environment to attract investors for large red loan portfolios.

In the coming months, there three securitisations planned (by Alpha Bank, Piraeus Bank and National Bank) totaling approximately €25 bn. The restart of auctions will strengthen the confidence in the investment market.

For that to happen, there has to be a gradual restoration of liquidations as requested by the funds that invest in RE mortgages and by the servicers. Their ability to proceed with auctions also affects the prices of the forthcoming securitizations; any extension of the “freeze” of auctions will lead to low valuations of the portfolios under sale.

Real estate auctions have been suspended since March due to the pandemic. This not only led to the “freezing” of liquidations but also to the suspension of installments for housing, consumer and business loans.

The auctions issue is considered crucial in view of the establishment of the institution that will buy the main residence of the borrowers unable to repay their loans. The lease model for these properties will be applied to the households that lost their ownership and, according to the plan of the Ministry of Finance, the properties will be acquired through auction and then they can be rented to vulnerable households for a low rent.

Original Source: Kathimerini

Adaptation/Summary: Kiki Athanasiadis

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