A holistic approach to private debt seems to be sought by the state and relevant bodies as a whole, as it is moving around 100 billion euros as a time bomb to the social foundations.

The most difficult part of this debt to deal with is the mortgage loans which in the portfolios of the Claims Management Companies have a valuation of around €22 billion with most of them carrying collateral sufficient to “prevent” what some would call favourable arrangements for borrowers.

It is worth noting that 8500 property auctions are scheduled by the end of the year, of which only 500 have been suspended.

The way servicers work is to serve a goal named recoveries. In this respect it is the mortgage NPEs that can perform best in serving the servicers’ goal and that is how the related problem begins.

The Receivables Management Companies do not carry out haircuts where there is a cover as they also impose conditions quite stringent on the collection of receivables in those cases where no agreement with the borrowers has been reached earlier. The most difficult condition to be met by the borrowers is, in order for a house not to be auctioned off, to give a significant amount up front, against repayment of the debt (about 10% and depending on the amount of the debt and the value of the cover) and then to follow the settlement in installments.