With a front-loaded “haircut” and new financing, the first mortgage loans that had been sold to funds are gradually returning to the banking system and are now being serviced normally.

These are loans worth some 2 billion euros, which today, after three years of consistente repayment, have “greened up” and can return to the credit system that is thirsty for new mortgages.

These loans have been regulated by the management companies with a significant debt “haircut”, which, however, will not kick in until the end of their repayment, in order to ensure that the borrower will adhere to the arrangement.

With the return of these loans to the banks, it is planned that the “haircut” will be front-loaded to the benefit of the borrowers, who will receive new financing from the bank to which they will now owe his debt. This way, they will repay their dues to the fund to which the loan has been sold, while earning the amount of te write-off that has been agreeded upon for the end of the loan repayment.

This initiative is being taken by doValue in collaboration wiith National Bank and Eurobank, as well as smaller banks, such as Attica and Optima.

Original Story: Ekathimerini | Author: Evgenia Tzortzi
Edition: Prime Yield