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Freeze on home repossessions defeated, foreclosures to continue

Foreclosure2
File photo

A motion to discuss a new freeze on home repossessions was defeated in parliament on Thursday, with the House deciding instead that a legislative proposal on the matter be tabled to committee after the Easter holiday.

The motion was tabled at the last minute by opposition Akel, Greens MP Stavros Papadouris, and MP Costis Esftathiou while the House plenary was in session.

A vote was held on the matter, with the motion garnering 22 votes for, 27 against.

The outcome means status quo on the issue of foreclosures – they can proceed.

Last month parliament had voted against extending the freeze on repos – effectively allowing banks to resume the practice.

Speaking on the House floor, Akel’s Giorgos Loukaides said their intention in filing their motion was to protect vulnerable borrowers – especially now amid inflation but also rising interest rates, making mortgage payments even more difficult to keep up with.

Loukaides warned of a ‘tsunami’ in home repos if borrowers were left unshielded.

And he criticised the government for taking too long in delivering an alternative solution for distressed borrowers, such as the promised ‘mortgage-to-rent’ scheme. That is intended to help homeowners at risk of losing their property due to mortgage arrears; allowing a person to voluntarily surrender ownership of their home to their lender. An entity buys the home from the lender and becomes the landlord. The borrower no longer owns their home but will continue living there as a tenant.

The scheme would need the nod from Brussels.

The mortgage-to-rent plan was seen as the previous administration’s lifeline to some 4,000 distressed borrowers, after the lack of success with the ‘Estia’ debt relief scheme.

As for the home foreclosures, the last pause had already lapsed at the end of January – meaning that property repos have since legally resumed.

A series of temporary foreclosures freezes had been implemented since 2021, usually for a span of a few months.

The moratorium concerned primary residences whose estimated value did not exceed €350,000, business premises hosting companies whose annual turnover does not exceed €750,000, and agricultural plots with an estimated value not exceeding €100,000.

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