Cyprus Mail

Finance ministry identifies unviable borrowers

The finance ministry has so far identified 700 unviable cases rejected by a state-backed mortgage relief scheme aimed at stricken borrowers and will be looking at ways to help them keep their primary residence.

According to the Cyprus News Agency, the unviable borrowers have been placed in categories according to their circumstances and will be handled on a case-by-case basis at a later stage.

The plan is to write down their loans depending on their revenues and the bank, with the rate reaching up to 60 per cent.

The balance will be then repaid by the state and the borrower, 50 per cent each.

Borrowers approved for participation in the Estia scheme will have their loans written down by around 33 per cent.

Through the Estia Scheme, the state would pay 33 per cent of bad debts on primary residences, valued at below €300,000, on condition that the debtor would agree to make regular repayments to the bank.

A source told CNA that everything depended on the final number of unviable cases. Currently there were 700 and the situation was manageable.

The authorities had 2,000 more applications to examine and if there is a large number of unviable borrowers, the state’s plans could change.

The government expected that 13,000 would apply for the Estia scheme, costing it €33m per year.

Eventually, the applications reached around 6,380, or €1.9bn worth of loans.

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