Greece to Subsidize Mortgage Payments to Tackle Bad Loan Crisis

Greece plans to pump as much as 1 billion euros ($1.1 billion) into its banks over the next five years by subsidizing a part of households’ mortgage repayments. Under the plan, some households unable to repay their home loans will restructure their debts with the banks, with the state then paying part of the remaining monthly installments, according to three people familiar with plan, who asked not to be named as details still need to be finalized. Greek banks are grappling with 88.6 billion euros of bad loans, a legacy of the country’s financial crisis. Mortgages are considered the stickiest component of the banks’ non-performing exposures, with lenders falling behind reduction targets set by their regulator.