25th May, 2010, Novini.dir.bg

Banks sell packages of toxic assets 25% of the value, a rim of the Political Party Rights and Freedom Movement (DPS) allocated € 300 mn for the fraud.

Groups associated to the leader of DPS Ahmed Dogan, have begun an invasion of the bank market. We are talking about an entirely new phenomenon. Many banks sell so-called toxic assets. These are loans that are not serviced more than four months. Their number has recently increased drastically due to the crisis and unemployment. The banks make full packages with 1800-2000 credits each - mainly mortgage and with a particular pledge, offering them secretly on the market in various forms.

At this stage, full silence is kept on the subject because of its delicacy. Usually the packages are offered at a price from 25 to 35 percent of the value of amounts not recovered. The transaction is favourable for both sides. Banks receive fresh money quickly and get rid of unnecessary estates and properties, which sale through an officer of the court is delayed, costs a lot and has a very low return. Besides that buyers acquire at a very low price attractive properties. There are also packages of company credits with so-called corporate pledges. Since the beginning of the year the process of selling packages of bad credits is already gaining great momentum.

Until recently, many banks used the services of companies to collect credits, which collected a relevant commission. However, this approach did not give good results and only a small part of the bad loans were collected. Therefore, the packages’ sale was necessary. The groups associated with Dogan are one of the first to invest in this new market. His people have already bought up more than 40,000 credits and are continuing to buy, is what has been talked about in the bank circles. Most of the acquired mortgages are of properties along the Black Sea and the mountain resorts. There were also homes in Sofia, Varna and Burgas. Doganov’s people paid straight away 25 percent of the cost of credit in cash and acquired the mortgage. They were forbidden to buy other business credits, except those with mortgages of commercial complexes.

For them, they were ready to count even 30 percent of the price of credit. Dogan’s circle thought to invest € 300 mn in the new venture. After the crisis and recovery of property prices that amount will be returned tenfold. The properties could be let out or even new agreements with borrowers at a higher price could be concluded.

This clever policy was suggested to Dogan by economic experts from the U.S. and Turkey, with whom he worked in the past ten years. Operation is carried out very carefully through investment funds and newly created companies for this purpose. Foreign companies are hired. His example has been followed by other groups as well. The game joined structures close to the former SIC and VIS and their derivatives. Many members of the underworld with free capital also began to buy.