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Estimates suggest 10,000 borrowers will benefit from Estia scheme

The ministry of labour

Eligible applications for the Estia debt-relief scheme are not expected to exceed 10,000, according to estimates from the labour ministry, which is involved in implementing the scheme.

Labour ministry senior official Vassiliki Hadjiadamou, based on information from the banks, told CNA that they expected a total of around 15,000 applications to be submitted but that eligible applicants would likely not number more than 10,000.

She urged any borrowers who think they might be eligible, to get the ball rolling and contact their banks.
“Submissions will start on September 2, but because the application needs to be completed and documents secured, it would be good for borrowers to start the process now,” she said.

The borrower should ask the bank for the details of his loan in order to fill out the application correctly. They will also need the bank’s assessment as to the market value of the home if someone feels they do not have the time to appoint their own evaluator.

The bank will then check whether the borrower has the ability to repay the loan, that is the loan is viable, as well as other eligibility criteria, such as the borrower’s income and assets, and will conduct a preliminary assessment of the application, which will then be sent to the labour ministry.

If the bank considers the loan to be unsustainable or ineligible, the application will be rejected by the ministry, and if the bank considers the loan to be eligible, the ministry will verify the eligibility criteria.

Hadjiadamou stressed the importance of having all the necessary documentation to save time and hassles. The deadline for submission of applications is November 15 this year.

The banks have until November 29 to complete their end of the process and the ministry until March 2020 to do its bit. It already has seven people working on the process and will add another five by September.

The government on Friday signed a Memorandum of Understanding (MoU) with banks and credit buyers for the implementation of Estia. Finance Minister Harris Georgiades said it was a very important step towards addressing the problem of non-performing loans.

MoUs were signed between the government and the Bank of Cyprus, Hellenic Bank, Cyprus Asset Management Company (Kedipes), Alpha Bank, Astrobank, Eurobank, National Bank of Greece, the Housing Finance Corporation and Gordian Holdings.

The scheme has been approved by the European Commission and will offer the chance to restructure and alleviate the obligations for a fairly high proportion of borrowers that meet the criteria, Georgiades said.

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