* It takes four or five auctions to find buyers for the buildings put up for sale
* The buildings that banks foreclose sell at 25% below their initial price, whereas the ones sold by the Tax Administration, sell for half their price
Romanian banks seem to be increasingly affected by the drop in the ability of their individual or corporate customers to pay back their loans.
The arrears of the population and of companies have increased 6.52% MOM in April, to 11.099 billion lei (2.68 billion Euros), with a weight of 5.51% of the total volume of loans.
Banks are eventually forced to resort to foreclosures, after coming to the conclusion that restructuring the loans does not guarantee they would get back the amounts they lent out.
However, most of the time, the foreclosure process is extremely tedious, requiring several auctions for the sale of an asset, with the starting price for the auction dropping each time.
Radu Graţian Gheţea, the chairman of CEC Bank and of the Romanian Banking Association, said last week that foreclosures aren"t a good solution for banks: "Nothing gets sold or at least very few auctions conclude successfully, because there is no demand". The official of the RBA gave the example of an asset worth 830,000 lei in the county of Timiș, for which the proceeds from its sale could not even cover the expenses with the bank bailiff.
Cristina Boarnă, the developer of the project "executări.com", explains for the readers of "Bursa" the difficulties that bailiffs face when trying to sell the assets foreclosed by the banks or by the Tax Administration.
He said: "Over the last 2 months, it"s mostly apartments and homes in the county capital cities that got sold. The properties put up for sale get sold on the fourth or fifth auction. On average, between 10 and 20% of the goods auctioned off this year found buyers."
