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Over 3,600 foreclosure applications filed at land registry

By George Psyllides

OVER 3,600 foreclosure applications have been filed at the land registry, a senior official said on Friday, with the huge majority coming from banks.

Deputy land registry director Vasos Petrides said the department had received 3,639 applications, mainly from banks, which could soon be able to activate the procedure themselves.

Petrides said legislation was in the pipeline that would also allow banks to start the procedure themselves, sell the properties, and then allocate the proceeds to cover the debtors’ obligations.

“It would be up to the bank to choose one of the two procedures,” Petrides told the Cyprus News Agency.

Petrides said he expected banks to choose to handle the procedure alone, thinking it would be faster.

However, he added, delays were also possible in this case if the debtor secured a court order suspending the procedure – a usual phenomenon in the cases handled by the land registry.

“It is a time consuming procedure, repetitive, and this is why these cases cannot be completed,” Petrides said.

Lawmakers have been discussing a joint AKEL-EDEK bill aiming to protect primary residences and the premises of small businesses that are unable to repay their mortgage, by allowing court-mandated suspensions of repayment for a fixed term.

While small businesses eligible to apply for protection under the proposed bill are capped at employing up to 10 people and with a €2 million maximum turnover, no such cap is being considered for eligibility based on home value.

The reason, according to sources, is that such a provision would likely raise discrimination issues.

The finance ministry has said that it was working on broader-scoped bill as part of the bailout-mandated adjustment programme.

The finance ministry agrees with the Central Bank of Cyprus, and the banks association, that lenders cannot be asked to subsidise insolvent borrowers and that the committee proposals created the risk of moral hazard.

“Borrowers that may or may not face crisis-related solvency issues would likely inundate the courts with requests to suspend repayment,” a spokesman from the banks association has said.

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