Borrowers must deal with funds instead of their banks

Mortgage and corporate loans secured against properties and totaling an estimated 70 billion euros will have been transferred to various funds by the end of the year, radically changing the basis of the debate regarding the protection of the main residences of individual borrowers as well as tens of thousands of professionals or entrepreneurs.

After suffering criticism for years over their efficiency in achieving the settlement of bad loans, banks are definitively withdrawing from that field, leaving it to the experts – i.e. management companies, which will not be authorized by banks, as was the case with debt collection companies, but by foreign investment funds: They will now be the new owners of the loans, enjoying the full rights to redeem collateral – i.e. properties or other assets associated with those loans.

This means borrowers will now have to deal with the servicers and not the banks. Home auctions – whether they concern a main residence or not – will not be used as a threat for those who will not consent to having their loans restructured; they are already a vital tool in the hands of funds as they consolidate the funds’ presence in the bad-loan market.

Source: ekathimerini.com