Cyprus Mail

Signs of compromise on foreclosures

By Angelos Anastasiou

THE GOVERNMENT and parliamentary parties appear to be considering the suspension of new, tougher foreclosures legislation on primary residences, in a bid to resume the review of Cyprus’ adjustment programme by international creditors, which had been put on hold due to a blanket freeze on implementation of the law.

According to state radio, during President Nicos Anastasiades’ meeting with party leaders on Monday, the acrimonious law was the object of much discussion.

Anastasiades informed the party leaders of the discontent among Cyprus’ international creditors, in connection with the Parliament’s decision to suspend the foreclosure legislation until January 30. According to the loan agreement between the government and its international creditors, the law was meant to be enforced on January 1, but opposition parties united to pass a suspension of the law until the insolvency framework – a set of laws governing bankruptcy – was tabled for voting by the government alongside the foreclosure law.

Following discussion, it was decided that parliamentary parties ponder the option of settling for a temporary suspension of foreclosures of primary residences, in exchange for abandoning the blanket freeze.

Meanwhile, Anastasiades assured parties that he will waive his prerogative of referring the bill suspending the foreclosure law to the Supreme Court, given that the freeze is only valid until the end of January.

Although foreclosure legislation was voted last September, primary residences had been excluded until January 1, 2015, to coincide with the scheduled voting of the insolvency framework. But preparation of the insolvency bills was delayed, and opposition parties cited the delay as reason for blocking implementation of the law.

The insolvency framework, comprising five different laws, is almost ready to be submitted to the House, as the fifth and final bill is still being discussed between the government and Troika technocrats.

Nonetheless, opposition AKEL’s deputy Yiannos Lamaris warned on Monday that his party is prepared to extend the suspension of the foreclosure law, should the insolvency framework not be forwarded to the House prior to the expiry of the implementation freeze.

He was speaking after a joint session of the House finance and interior committees, in which the thorny issue of guarantors being saddled with the responsibility of loan repayment when the borrower has defaulted through bankruptcy remained unresolved.

Deputies argued that guarantors cannot be treated unfairly relative to borrowers, who get a chance to be let off the hook through bankruptcy, but faced resistance from the Banks Association, which cited legal issues as the contract signed with guarantors is independent of the one signed with the borrower.

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