Cyprus Mail

Applications being accepted for mediation in loan restructuring

By Angelos Anastasiou

The newly-operational Financial Ombudsman’s office started accepting applications by borrowers for the restructuring of non-performing loans, it announced on Friday.

“We will spend the time required to address immediate needs, as well as large numbers of applications – both the staff and the ombudsman are willing to put in as much work as necessary to respond to the public’s needs,” Financial Ombudsman Pavlos Ioannou told the Cyprus News Agency.

The ombudsman is mandated with mediating – but not arbitrating – disputes relating to defaulting loans, and issuing non-binding suggestions.

Ioannou explained that his office will do its best to help distressed borrowers, without losing its objectivity and impartiality, and without creating false hope.

“If there is good will from both banks and borrowers, the process can be effective,” he said.

The Financial Ombudsman’s office will be staffed with 13 secondments from the broader public sector.

“These are officials with significant experience in public sector procedures, especially with regard to archiving, information management and serving the public, and highly skilled technocrats with academic credentials, who will be utilised as data and complaints analysts,” Ioannou said.

As well, the ombudsman’s service will appoint mediators from a list of 200 qualified individuals, which Ioannou considers sufficient.

The mediators were trained on credit facilities in Central Bank-organised seminars on November 15, following a request by Ioannou to the governor of the Central Bank.

The Financial Ombudsman also referred to the support his service receives from the finance ministry, especially on information management, as well as the Public Service and Personnel Department, which supports the ombudsman’s office on archiving issues.

Borrowers may submit applications to the Ombudsman’s office either by post or by hand.

“Also, our website [] will be up by Friday afternoon,” Ioannou said.

Mediators can step in for loans up to €350.000 which are in arrears, for which no legal proceedings are underway, and no foreclosure proceedings have been initiated.

The application must be submitted within 14 days of the date when the borrower has submitted all relevant information to the lender, or within 14 days from the date when the lender submitted its first loan restructuring proposal to the borrower in writing.

In addition for an unserviced loan to be eligible for mediation, the mortgaged property must have been used as the borrower’s primary residence for at least six months, and the borrower must not have been deemed insolvent or under liquidation.

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