Re.o.Co. – NPLs ENGINEERING

The recovery of a mortgage credit mainly consists of the enhancement of its guarantee, i.e. the property. GMA precisely relies on this assumption for its operations.

Therefore, in parallel with the tasks carried out by the lawyers, the company performs clearly belonging to the real estate industry.

GMA, in fact, manages real estate on its own account and on behalf of third parties, mainly through securitisation special purpose entity (the so-called Reoco, or Real Estate Owned Company); these entities take part in judicial auctions upon request of the creditor and raise the price up to a level deemed appropriate based on the original business plan.
According to whether GMA also acts as a credit manager in the transaction, some activities connected to the properties may also be carried out in advance with the purpose of enhancing the properties already subjected to enforcement.

The main tasks:

  • Assessment of the value of the property disposed of by public sale through the REV GMA software (see the “due diligence” page);
  • Verification of the urban / building / cadastral compliance of the buildings, assessment of the costs that may be incurred to ensure compliance with the law;
  • Feasibility plan for any possible development or change of the intended use;
  • Profitability and management plan for the properties for accommodation purposes;
  • Establishment of relationships with the sitting tenant for the submission of new out-of-court agreements, including, for example, the marketing of the property as a collateral and the settlement of the residual debt;
  • Analysis of the local market and specific marketing activities aimed at improving the auction in the short term;
  • Coordination of the activities included in the business plan up to the sale or the lease of the property.

Recently, in our reference market, new Reocos have been established, mainly for the purpose of safeguarding the value of the mortgage credits in case of auctions; however, this approach is not always constructive and positive for the credit recovery. On the one hand, the registration of a property defines the outcome of a judicial procedure and crystallises the assets, while, on the other, it generates new costs connected to the property and the ordinary and extraordinary management of the same property.

GMA has created an in-house Property – Real Estate department led by a CEO. As a result, its resources are highly specialised: the internal division between asset manager and property manager helps the staff develop specific skills and allows the company to offer a highly efficient service