Cyprus Mail
Cyprus

Opposition parties to decide Tuesday on proposal freezing repos

OPPOSITION parties will decide Tuesday whether to table to the House plenum this week a joint legislative proposal by which homeowners would be able to apply to a court to freeze repossession proceedings on the grounds that banks did not previously exhaust all avenues to restructure a loan.

The proposal is backed by Diko, the Greens, Solidarity and the Citizens Alliance.

Speaking to reporters on Monday, Angelos Votsis, chair of the House finance committee, conceded that some MPs were not confident their discussion in parliament so far had exhausted the issue.

The financial ombudsman meantime told legislators to hold off, as by the beginning of September he would be ready to produce a detailed memo with a ‘holistic approach’ to the matter of foreclosures and loans in arrears.

September 1 is also the date on which the government-funded ‘Estia’ debt relief scheme for vulnerable homeowners will kick in.

Earlier, the finance minister had issued a similar plea to MPs, urging them not to tamper with the main foreclosures law until the ‘Estia’ programme were tested.

The law on foreclosures was amended in the summer of 2018 to make it more effective, some four years after it was passed by parliament with changes that essentially rendered it toothless and unable to help banks reduce non-performing loans.

Now, opposition parties have drafted a series of amendments which banks fear would defang the law by enabling strategic defaulters to drag out the foreclosures process.

Banks, anxious to reduce the stock of non-performing loans on their books, argue that any watering down of existing repo laws would deny them the toolkit to exercise leverage on debtors.

Meanwhile socialists Edek are going a step further, with a proposal of their own that would suspend all repossessions for a period of time.

Edek leader Marinos Sizopoulos reiterated that he would insist on their proposal being discussed at this week’s plenary session.

It aims to halt foreclosures at least until the ‘Estia’ scheme goes live and also until parliament concludes discussion of the bills aimed at ‘improving’ foreclosures regulations.

Sizopoulos claimed that lately banks have been taking more and more ‘arbitrary actions’ against debtors in repossessing primary residences, by exploiting loopholes in the legislation.

The parties’ main objective, he added, is to protect people from these ‘abuses’.

Figures released recently by the Bank of Cyprus, the island’s largest lender, show that over the past 12 months it foreclosed on 242 properties; not one of these properties was a primary home.

But Sizopoulos says these data are misleading. To his knowledge, a number of repossessions have taken place on residential complexes with a shared title deed, where the affected individual flats served as primary residences.

Chiming in, the Greens’ George Perdikis said vulnerable homeowners cannot be left in the lurch until September.

“At the very least we need to give borrowers a minimal amount of protection against the terrible power granted to the banks last July,” he asserted.

 

 

 


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