Cyprus Mail

Finance minister to brief MPs on Estia, foreclosures

Finance Minister Haris Georgiades

Finance Minister Haris Georgiades will inform the House finance committee on Monday about the Estia scheme to help those with non performing home loans as well as the government’s ideas to help those who do not qualify to take advantage of the scheme.

He will then be joined by the governor of the central bank (CBC) to speak about foreclosures.

At the last meeting of the committee on foreclosures on August 2, governor Constantinos Herodotou had asked the committee members to give the CBC time to prepare a mechanism to deal with them, based on the advice and opinions of the Single Supervisory Mechanism (SSM) and the European Central Bank.

Later that day parliament accepted a presidential veto to a bill amending the foreclosures law with potentially negative effects on banks and the economy and approved a compromise proposal designed to protect vulnerable borrowers.

The bill in question had been passed by opposition parties on July 12 who said they wanted to introduce additional safeguards for homeowners with mortgages they are unable to service and to restore the negotiating balance between lenders and borrowers.

President Nicos Anastasiades vetoed the bill amid warnings from the European Central Bank, the Single Supervisory Mechanism, and national authorities, that it would weaken the foreclosures legislation and seriously impact the financial system and the economy.

Ruling Disy supported a Diko compromise proposal that affords borrowers with bad debts the ability to seek recourse with the financial ombudsman who will decide whether a lender had violated the central bank’s code of ethics regarding loan restructuring.

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