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Mortgage relief applicants hit 50 per cent of those eligible

More than 5,400 people have now applied for the state mortgage debt relief scheme, representing some 50 per cent of those eligible, Finance Minister Constantinos Petrides said on Friday.

In a written statement, Petrides said data received from banks and other organisations showed that the final number of applications to enter the Estia scheme had exceeded 5,400, which was over 50 per cent of those expected.

After the process was completed, lenders will evaluate the applications and decide which ones will be submitted to the government for final approval.

The government expects that a large number of applicants’ loans will become viable after their inclusion in the scheme.

“For the really vulnerable borrowers who will not become viable despite Estia’s generous provisions … the government’s intention in the short term is to prepare a social programme they could benefit from,” he said.

Until recently, applications for Estia did not meet the state’s expectations with the government recently relaxing the conditions as the end-of-year deadline approached.

It said applications would be accepted even with incomplete details, which could be provided by March 31.

The Estia scheme was proposed in the wake of the 2013 financial meltdown to help people with non-performing loans retain ownership of their primary residence.

The plan would also contribute to the deleverage of Cypriot banks.

As part of the plan, borrowers would have their loan reduced by about 36 per cent of its value, with the taxpayer helping out and the bank taking a small hit.

Critics say that the plan rewards bad investment and sends the wrong message to those who paid off their loans in full.

 

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