Latest Headlines

British rescue proposed in property mis-selling

London-based law firm Maxwell Alves is lobbying politicians and government agencies to resolve claims between clients and property developers in Cyprus without resorting to litigation.

RECENT proposals by Maxwell Alves, Solicitors in the City of London, representing a number of victims of mis-selling, have been accelerated in view of the crisis in Cyprus and in anticipation of what may happen.

Under these proposals the British Government will arrange for a line of credit to British victims of mis-selling which will allow lump sum settlements to be reached with the Cypriot Banks involved.  It will also allow certain other terms to be imposed to resolve cases which are not purely a loan dispute.

Maxwell Alves has long been lobbying politicians and government agencies and negotiating on behalf of their clients with the Banks and property developers in an effort to resolve these claims without resorting to litigation.

“These matters are just too complicated to resolve by court action without tears for both sides,” explains George Kounis the Consultant at Maxwell Alves leading on these cases “but without a facility to motivate the banks to settle the next step in a lot of these cases is litigation”.

In a recently published White Paper and Addendum following the crisis, he reports on the progress of these discussions and the proposed British rescue.  The proposal uses the draft Heads of Agreement recently submitted to Alpha Bank Cyprus, after a meeting between George Kounis and the Managing Director of the Bank, as the basis of reaching a settlement.

“There can be no blanket agreement,” explains George Kounis.  “Each case is different and has to be negotiated separately within the framework of the Heads of Agreement”. The same proposals were also discussed with the other banks involved.

The crisis in Cyprus will necessarily mean that banks will no longer have the luxury to wait for their money.  In any event, Maxwell Alves believe that the requirement to clear Non-Performing Loans within 18 months will almost certainly be a term of the Troika bailout.

“We are expecting a cull,” says George Kounis “and although Banks will be committing suicide by getting stuck in court battles for years, we still need to protect our clients and try to lift them out of what is likely to become a war zone”.

For this reason Maxwell Alves are actively seeking the involvement of the British Government and the engagement of the Cypriot Government which will lead to a full and final resolution of the mis-selling saga and may release more than €1 billion to cash-strapped Cypriot banks.

Accordingly, as soon as the crisis struck, George Kounis met Bill Cash MP who is co-ordinating an All-Party Parliamentary Group (APPG) for the “Defence of the Interests of British Property Owners in Cyprus” with a view of promoting a rescue by the British Government and agreed to submit proposals for a British rescue.  These have now been submitted.

“We estimate that there are up to 10,000 British victims of Cyprus property mis-selling but only a small proportion of them have made their voices heard and are represented,” commented George Kounis.

These victims are urged to come forward and contact their MP if they are residents in the UK and ensure that their MPs are indeed members of the APPG and that they fully support the proposals submitted by Maxwell Alves. If they are non-UK residents they should contact the local British Consul General who can in turn communicate their views through the Foreign and Commonwealth Office.

Readers' comments

Comments on this article are no longer being accepted.

  • Nath says:

    If I had a Swiss Franc for every “expert” who had said “Caveat emptor” in relation to this issue I would have paid my mortgage off by now!

    The situation is not quite as clear cut as you make out David, there are far more issues involved here than just the alleged mis-selling of CHF loans.

  • David Simpson says:

    Anyone who took out a Swiss Franc mortgage must accept the consequences of that decision. If people are rescued we face the problem of moral hazard. Caveat emptor I’m afraid. No use in blaming the bank or advisors. Do not borrow a significant sum without reading the small print! There was plenty of advice around in 2008 advising against these mortgages: Advice on Swiss Franc mortgages.

  • Costas Apacket says:

    SoOJB

    Priceless and yet more tears!

    Can’t wait for chapter 3!

  • Spirit of Odd Job Bob says:

    A fragment from the ancient Book of Alashyia has been found near Kourion and is currently being translated by SoOJB. Here are his findings so far:

    “And lo, it came to pass, in the time after the Great Golden Fleece of the Sons of Albion, who had come to dwell on the isle of Alashyia (9 months sun a year, low crime, nice people), that a great many False Prophets did prey upon them in their grief.

    The Sons of Albion raised their voices up unto the heavens and cried: “Oh Albion, why hast thou forsaken us?” And no answer did they receive.

    They cried out to Pompous Euro Pilot (scheme), for his considerable guidance. And much guidance they did receive, but cash, they received not.

    The weeping and wailing and gnashing of teeth grew to fever pitch and the forlorn cried, “Who will save us?!”

    The Sons of Alashiya, who had devised many a strategy to divest the Sons of Albion of their riches, hearing the cries of the forlorn, colluded with the Unholy Trinity of Usurers, Practicers of Law and False Prophets (who did momentarily lay aside their Woodbines so as to concentrate on the fleecing), and they cried, “Fear not, for tidings of great joy we bring unto you!”

    And they did furnish them with shiny baubles of alleged great power, such as the “Get your deeds for a fee” gemstone, the “Planning Amnesty” jewel, the “Unfair Commercial Practices” metal, the “Plan for All Seasons” incense, the “You should have told me there was a currency risk” holy relic and a new one, the “Maxwell Alvays looking to make money off of you!” sacred snake oil. And the purchasers of these baubles were swallowed whole by the labyrinthine minefield of the Practicers of Law. And the Sons of Alashiya were much pleased.

    And they did rejoice in the streets and rub their fat hands in pleasure as they danced and cried, “Rejoice, for we have secreted the fruits of our labours in far way places. Who now can we fleece?”

    To be continued…

  • aggisdemetri says:

    Im sure at times of crisis the government would have changed the laws for developers and private builders to obtain a final completion certificate as I understand once you have this its then up to the lands registry office to issue titles.

    but I wont be holding my breath as the government staff in these offices dont want the files to progress or they wont have any work to do.

    dear reader the island is doomed, dont think for a minute anyone will have a title.

  • Geo says:

    Agreed Costas. I have heard so much talk and have yet to see any action.

    The only winners so far are the Lawyers.

  • Costas Apacket says:

    andyp – I agree.

    I think there is a distinct separation between those who have been potentially miss sold Swiss Franc mortgages, and people with non-Swiss Franc mortgages, or no mortgage at all, who are up to date with the payments and are just being denied their Title Deeds.

    In any case the Troika MoU commits the Cypriot Government as follows:

    The authorities will:

    By [Q4-2014], eliminate the title deed issuance backlog to less than 2,000 cases of immovable property sales contracts with title deed issuance pending for more than one year. The authorities will enhance cooperation with the financial sector to ensure the swift clearing of encumbrances on title deeds to be transferred to purchasers of immovable property, and implement guaranteed timeframes for the issuance of building certificates and title deeds.

    So according to the MoU, all property purchasers, save 2000, who have been waiting for more than 1 year for their Title Deeds, should have them at some point between now and the end of 2014.

    Is this why our ‘Legal Friends’ are now in such a panic to sign us all up to their proposed actions?

    Whilst there is some ambiguity in the MoU wording, in my humble opinion, the key issue that the Lawyers and Bill Cash’s group should be seeking to clarify is how this, ‘swift clearing of encumbrances on title deeds’ will actually take place and who will be liable for this clearing of debt.

    Will the Banks be made to take it on the chin via increased NPL provisions, or will the Cypriot financial establishment try to shaft us once again?

    I plan to ‘wait and see’ what happens in my own personal circumstances and to then take action, if necessary, to protect myself either alone or as part of a larger group, when I actually know what the facts are.

  • Costas Apacket says:

    andyp – I agree.

    I think there are distinctly seperate issues here between those who have been potentially mis-sold Swiss Franc mortgages, and people with non Swiss Franc mortgages, or no mortgage at all, who are just being denied their Title Deeds.

    In any case the Troika MoU commits the Cypriot Government as follows:

    The authorities will:

    By [Q4-2014], eliminate the title deed issuance backlog to less than 2,000 cases of immovable property sales contracts with title deed issuance pending for more than one year. The authorities will enhance cooperation with the financial sector to ensure the swift clearing of encumbrances on title deeds to be transferred to purchasers of immovable property, and implement guaranteed timeframes for the issuance of building certificates and title deeds.

    So according to the MoU, all property purchasers, save 2000, who have been waiting for more than 1 year for their Title Deeds, should have them at some point between now and the end of 2014.

    Is this why our ‘Legal Friends’ are now in such a panic to sign us all up to their proposed actions?

    Whilst there is some ambiguity in the MoU wording, in my humble opinion, the key issue that the Lawyers and Bill Cash’s group should be seeking to clarify is how this, ‘swift clearing of encumbrances on title deeds’ will actually take place and who will be liable for this clearing of debt.

    Will the Banks be made to take it on the chin via increased NPL provisions, or will the Cypriot financial establishment try to shaft us once again?

    I plan to ‘wait and see’ what happens in my own personal circumstances and to then take action, if necessary, to protect myself either alone or as part of a larger group, when I actually know what the facts are.

  • andyp says:

    Likewise Costas I am a total cynic. Never used to be but hey that is what happens when you “buy” in Cyprus.

    This lawyer suggests that everyone will lose by fighting individually, but why? They propose a settlement funded by UK Government BUT paid for by the victim. The victim has done nothing wrong and like Andrew says the lawyer in a chain of causation is in fact to blame and liable for the victim’s plight.

    As I have posted on many occasions this is a fraud involving Government, Lawyers, developers and Bankers. Totally coordinated.

    In this case we now have lawyers negotiating a bulk settlement but this is a settlement of Developers debt at the expense of the victim. Why? They lied they cheated us why pay them?

    The banks have all now written down or are in the process of writing down the bad debt, WHICH THEY NEVER BOTHERED PURSUING, so will the settlement which Alpha seem keen on, reflect the write down or in reality will it be another bankers bonus?

    Some years ago I posted on this site that everyone had forgotten about the crooks hiding in the background and facilitating these frauds who had never been previously mentioned. The Banks.

    Give them nothing and if you can fight for what is yours. A personal opinion.

  • Janner says:

    I have to make the point again. What is the response from the Cypriot Government. To my knowledge they have never directly answered the many relevant points raised with its government over the years. They do not answer because they know its true. The head is firmly in the sand hoping the problem will just go away. Well, it won’t and neither will we!

    Keep the pressure up!

  • Andrew says:

    Any lawyer who did not inform their client of the existence of an outstanding developer mortgage has failed miserably in their duty of care and should be made to compensate their client. Lawyers are the worst offenders in this fiasco.

    Who can a person trust if not his or her lawyer?

  • Janner says:

    And what do the Cypriot Government say about this matter………..

  • Elizabeth says:

    @Nigel

    There are also other UK and Cypriot law firms involved in assisting buyers in this mis-selling scam (or fraud as the UK OFT calls it) would you please care to enlighten us as to some of the others?

    Also the article seems to suggest that Bill Cash and the APPG have in some way endorsed the ‘proposals for a British rescue’ do you know if this is the case as only this lawyer’s name appears on the document?

    Also who will fund this law firm’s activities re Alpha Bank? the clients? Alpha Bank? or both of these potential beneficiaries?

    I agree with andyp “the banks should pay for their own greed and stupidity”

    and by the way, doesn’t Alpha Bank have a UK banking licence and presence? Remember how the Icelandic banks’ UK assets were sequestered by the UK Government at the time of that collapse.

  • @Elizabeth – there are two sets of groups:

    1. Those wanting to renegotiate their CHF home loans with the Alpha and other banks.

    2. Those taking action against the banks as they consider that they were mis-sold home loans denominated in Swiss Francs.

    Bill Cash MP has formed an All-Party Group for the for the Defence of the Interests of British Property Owners in Cyprus. He has been contacted by lawyers representing the various groups – and also by members of the groups (I spoke with Bill last week).

    As I understand the article, the rescue proposal was prepared and submitted to Bill Cash at his request – I have no further details.

    I expect that those engaging the various law firms will be paying for their services – and some of them will recover their costs if they are successful in obtaining court judgements.

    Other groups are being represented by Judicare and Highgate Hill amongst others.

  • Costas Apacket says:

    I’m sorry, but these days whenever I hear Lawyers suggesting that I should get in touch with them so that they can ‘help’ to solve the problems with my Cypriot property purchase I just see the pounds rolling away into another pointless and unproductive black hole.

    It would appear that the Cypriot property cherry may have some bites left in it.

    I hope I’m wrong for those that wish to follow this path now, but I wasn’t wrong about the planning amnesty shambles and I don’t think I’m wrong about this either.

    Only time will tell.

  • Janner says:

    Surely the UK government can push the case for Brits having been mis-sold property by not allowing any UK money to be used to bail out Cyprus until the matter is dealt with. Seems to me that the UK government does hold some cards after all.

    I am sure Bill Cash MP knows this.

  • Stuart says:

    Once again I find myself urging readers of this column to refresh their memories of the three previous articles mentioned above under “RELATED CONTENT”.

    Start with “A plan for all reasons” and follow up with “Bank opens dialogue in Cyprus property mis-selling” and, finally, “Cyprus property mis-selling could cost €1 billion”.

    The plethora of highly rational comments to these three articles should serve to convince anyone of the reality check that needs to be applied to such tenuous promises of salvation.

  • steve says:

    I approached Alpha Bank last year to ask them to repossess my mortgaged property only to be told that they do not have the facility to repossess any property. STALEMATE again

  • Kayleigh says:

    I wonder about the fate of the thousands of NPLs that the banks are hiding, such as mine. My property is unlikely to ever complete yet the bank continues to extend the start of repayments for the loan, from Sept 2011 to Feb 2012 to Dec 2012 to Feb 2013 and so on. Meanwhile continuing to charge interest of course, very likely knowing this loan will never get paid.

  • Alan Waring says:

    @Nigel. Sounds like a walk in the park! What about those loans that are so far gone, so delinquent, that no renegotiation/restructuring is possible? I’d take a guess that it’s a high percentage, given what we’ve all been hearing for the past couple of years.

  • andyp says:

    I too think the pressure will be on to repo properties which only have developer’s mortgages on them in the first instance albeit a stupid move. Hence my earlier post that there should be no settlement with these crooks. Sets a dangerous precedent and at the end of the day the victim will pay for “the line of credit”. The banks should pay for their own greed and stupidity.

  • @Alan – The banks have plenty of time to renegotiate/restructure loans with borrowers.

    Timetable for non-performing loans:

    – Central Bank guidance issued by 30 May 2013.

    Timetable for collateral seizure:

    – Submit legislative changes to parliament mid-2014.

    – Implement changes end-2014.

    – Amend legislation on the forced sale of mortgaged property end-2013.

  • Alan Waring says:

    @Nigel. You may be right about a glut of repossessions not occurring. However, whereas the banks may not wish to repossess for the reasons you state, how will this square with the Troika memorandum and the unequivocal requirement for the banks now to properly exercise a 90-day NPL procedure which they have not done before?? Will not the banks be driven into a schizoid frenzy, as they cannot exercise the two diametrically opposed requirements?

  • @Pippa & @Andrew – please see my comment of 4:24 pm

    I think a glut of property seizures following the reclassification of NPLs is unlikely for the reasons stated.

  • Pippa says:

    @Andrew,
    You echo the concern of myself and I expect many many others. Are we to be sacrificed for paying our debts in full??

  • Andrew says:

    I can see why Banks might not want to take the home of someone who is paying a mortgage.

    What will happen to the people who have paid in full and had no idea that an NPL was attributed to their developer. Will the banks consider these homes easy pickings?

  • @Alan – I think it unlikely that the reclassification of NPLs will result in a glut of property seizures:

    • Banks need money (not homes) to achieve their capital ratios.

    • Repossessed homes will need constant care and maintenance (at the banks’ expense) to preserve their market value and saleability.

    • Banks will not act against clients maintaining mortgage repayments even if developers’ loans are non-performing.

    • More homes for sale put further downward pressure on prices and this will further undermine the economy and the banks.

    • Who is going to buy these homes even at a knockdown price?

    • I’m certain that a glut of property seizures will destroy the market for many years.

    I know we’ve had a village idiot running the country for the past few years, I just hope the new government can muster more brain cells between them.

  • Alan Waring says:

    This proposal might work but it does look complex and, no doubt, lucrative for all the lawyers involved! Surely, a much more realistic (and tried and tested) approach would be a compulsory ‘bad bank’ for developer debt, along the lines of the National Asset Management Agency set up in Ireland when it too was lumbered with an EU bailout and collapse of its property sector. The advantage of a NAMA is that developers do not go bust and the interests of both buyers and the state are protected.

    A NAMA type solution was put by the Cyprus Property Action Group to the former Finance Minister Sylikiotis some 3 years ago and has been raised a number of times with other influential parties since. I recall that it has been mentioned on this website several times. Regrettably,it was ignored by the previous government. I have yet again written it into a forthcoming article for Financial Mirror and suggested that if the new government fails to act this time then it is likely to be regarded as complicit in the continuing system of fraud and sovereign corruption. We live in hope.

  • andyp says:

    As a point of principle any bank involved in not pursuing developers for the repayment of loans but rather relying on recovering the debt from an unsuspecting buyer should get nothing. They have been complicit in this fraud and should be held to account. These crooks have been the cause of misery to many and deserve to rot in my humble opinion.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

  • Text size

SELECTED REPORTS

Back to top