Cyprus Mail

MPs working to stop repossessions

By Peter Stevenson 

DEPUTIES are discussing a proposal at committee level that would stop banks from repossessing homes or taking legal proceedings against anyone who is unable to make mortgage payments due to the financial crisis.

AKEL MP Yiannos Lamaris drafted a bill by which banks would not be able to take legal action against non-repayment of loans until a series of conditions were met.

It is believed the finance ministry, the central bank and banks are opposed to the proposal.

Head of the House Legal Affairs Committee, Sotiris Sampson, said that the central bank was expected to instruct banks by November how they were to go about restructuring non-performing loans and their repayment methods.

“I would like to reiterate that the House Legal Committee will protect those affected by the financial crisis where and when it can, depending on the government’s commitments to its international lenders,” Sampson said.

Sampson added that MPs intended to protect family homes from being auctioned off.

He said that efforts would be made to make an initial settlement and repayment of debts but in cases when the borrower was not satisfied they could appeal to an independent secondary body.

He explained that if an applicant then takes the case to court they would need to demonstrate that they had exhausted all internal bank processes and that they were really unable to pay the instalments.

The court would have the power to issue decrees to suspend payments for a specified period at an interest rate that it also determines.

Lamaris expressed his satisfaction that MPs had responded positively to the proposal. He said that according to the legal services there were no constitutional hurdles and the finance ministry said that no opposition to the bill could be made by the troika.

Through AKEL’s cooperation with the other political parties we have created a tool which will protect people in debt with its purpose to apply pressure on banks to restructure loans for people according to their financial capabilities,” he said.

Lamaris said however that the central bank and the banks’ union had expressed their reservations.

EDEK MP Nicos Nicolaides said the sudden increase in the number of people who were unable to pay their loans needed to be dealt with in three stages. The first would be restructuring the debt, the second agreeing on the terms of repayment and the third would be a court case.

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