Following my rant about morally bankrupt Vulture Funds demanding payments to release Title Deeds of properties bought by trapped buyers, my jaw hit the ground when I read that an independent MP has proposed a bill to stop the vultures attacking loan guarantors.
Question. What’s the difference between a loan guarantor and a trapped buyer?
Answer. A loan guarantor owes money to the credit institution from which the money was borrowed – typically a bank. A trapped buyer owes nothing to any credit institution – they have paid for their property in full.
It’s bizarre that someone who owes money to a credit institution should be protected from the vultures, while the vultures are free to demand payment from trapped buyers for someone else’s debts and potentially seize their property!!
Details of the MPs proposal was published in Stockwatch, which I have translated from Greek below.
Independent MP Alexandra Attalides has submitted a draft bill to Parliament aimed at protecting the rights of guarantors when loans they guaranteed are sold to Vulture Funds.
According to the explanatory memorandum of the proposal, the purpose is to amend the law concerning Credit Servicers and Credit Purchasers and Related Matters. The goal is to release individuals designated as guarantors in credit agreements with credit institutions from any financial or other obligations arising from such agreements if the loan is sold or transferred to a company or entity (e.g., a Vulture Fund) other than the credit institution with which the guarantors originally entered into the agreement.
Ms. Attalides stated regarding the proposal that “unfortunately, the financial crisis, as well as the way banks handled loan issuance, turned a large proportion of these loans into non-performing ones.”
“Those loans that were not restructured were sold at low prices to Vulture Funds. Although these loans are covered by the value of the collateral of the primary beneficiaries, which has already come into their ownership, the release of guarantors from their obligations was not foreseen,” she explained.
She further noted that “this has left a large number of citizens liable to these companies, with devastating consequences for their incomes and well-being.”
An English translation of the draft bill can be found by clicking here.