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Sparks set to fly over primary residence protection bill

Sparks are expected to fly in the House on Monday when MPs will discuss a draft bill designed to protect primary residences from foreclosure, which MPs want to send to the plenum on Thursday.

spark-flyBATTLE lines were being drawn yesterday for Monday’s discussion at the House on the draft bill to protect primary residences from foreclosure, which MPs want to send to the plenum on Thursday.

Accusations flew between the government and opposition parties, and between those parties in favour of the draft bill and those against it.

Those opposing it, including ruling DISY, spoke of another economic disaster and possible new haircuts on innocent depositors if banks were not allowed to recoup non-performing loans (NPLs) by seizing assets.

Detractors responded by accusing the government, of not for the first time, scaremongering with threats that the economy would come crashing down if the House didn’t cease and desist.

Government spokesman Christos Stylianides said the state was not immune to the problems of homeowners and was working on a solution to protect vulnerable quarters while still safeguarding the wider economy.

“The worst thing that could happen would be to slide into a bargain mentality, which would smell of populism,” he said.

“Fragmentary approaches to the bill’s philosophy are undermining its wider importance the effect it will have on our country’s financial environment.”

Interior Minister Socratis Hasikos called on deputies to wait until the government’s proposal was completed otherwise what was on the table right now would prove to be a “landmine for the banking system”“I trust that cooler heads will prevail in the House in the end so we won’t have a repetition of frivolous, harmful and destructive decisions of the recent past,” he said.

But the deputies were not to be silenced.

Main opposition party AKEL leader Andros Kyprianou said they had asked the government repeatedly to protect primary residences by law but their pleas fell on deaf ears. “The government acts once again in an indifferent, arrogant and irresponsible way. Our intention isn’t to cause trouble but to resolve this issue in a way to protect poor people. To make sure they have a roof over their heads,” he said.

“They are trying to blackmail MPs by saying that we either vote for the government’s plans or we are heading for bankruptcy”.

Kyprianou accused the government of deliberately waiting until the last minute to introduce a bill so the House can’t react to it. They would be given only until Thursday to present it, he said.

DIKO leader Nicolas Papadopoulos said that his party was all for protecting primary residences “but not palaces”. The party would consider proposals by all sides and then decide. DIKO agreed with protecting people who were genuinely suffering but not ready to allow abuse by people who just wanted to get out of paying their debts.

EDEK MP Nicos Nicolaides said that his party’s stance was that the bill should be voted by the plenum, criticising the government for attacking it. “They have demonised a bill that aims to protect poor home owners, saying in short that it will destroy the economy,” Nicoalaides said, adding that the government was lying when they say that they would protect primary residences. “How will they accomplish that, since they have already promised the troika that they won’t oppose repossessing houses?” he said.

Greens MP Giorgos Perdikis suggested the government do more to chase down big debtors. He said the government’s reaction was exaggerated.

But ruling DISY – which will vote against the bill irrespective – said it was not. Party leader Averof Neophytou said he believed the other parties would come to their senses.

“Hasty actions could have completely the opposite result,” he said. Neophytou said all MPs should bear in mind that if they vote in favour of some people not paying their loans, this move would burden others. “I don’t think it’s the intention of any MP, regardless of political affiliation, to trigger an additional deposit haircut,” he said.

Bank of Cyprus foreclosures

We have heard from two reliable sources that the Bank of Cyprus and a well-known property developer based in Paphos have mutually agreed for the bank to foreclose on a number of mortgages it granted for projects the company has built at Konia.

Readers' comments

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  • Mike says:

    This is Cyprus where you pay half a million for something worth a few tens of thousands, are bled dry and when the blood has all been drained put through a mangle. In the meantime the Armani suited, BMW driving so called pinnacles of our society squirrel away millions in safe havens and pass laws to protect themselves and their ilk. The minions will pay is never a truer word spoken here. Who was it that said we convict and imprison petty criminals but promote the largest of criminals to public office.

  • andyp says:

    Still no mention of innocent buyers of developer mortgaged homes being protected.

    Beginning to get that sinking feeling that there never will be any protection.

  • Bob says:

    Is this all a scam between the banks and the developers? The developers default on their loans, the banks repossess the assets which are generally homes owned by people who have paid the developers in full but have not received their title deeds. If the banks then sell these properties back to the developers who then sell them on at an inflated price, then BIG PROFITS TO BE MADE BY ALL EXCEPT THE UNSUSPECTING BUYERS.

    The larger developers seem immune from any prosecution.

    Isn’t it about time the banks took some responsibility for allowing the developers to have such large mortgages on properties that have already been sold. It’s all so corrupt!!!

  • Deanna says:

    NPLs – or debts, as I prefer to call them, are such a complex mess that no-way can one rule solve the problem. In fact it could be the proverbial opening of another can of worms.

    It needs debating by more than just those in government with vested interests. And I’m a tad suspicious the way they are rushing it through before the new lady Governor takes up office.

  • maggie says:

    I agree the miss selling of the corrupt banks of the Swiss morgage is an evil scam leading to thousands of people unable to keep up the outrageous over the top payments whereby nothing comes off the balance. The greedy banks have sold this in error and now all the owners facing dreadful difficulties will lose their homes. The courts need to step in and justify this dreadful mess. And the banks need to refund and do the right thing and wipe out the arrears, its all their fault ….They are 100 percent to blame!

  • @Peter Davis – It isn’t only developers who are having problems maintaining their loan repayments.

    At the end of January non-performing loans amounted to €26.5 billion of which €14.7 billion were loans granted to companies (including property developers).

    Many private citizens bought holiday homes for weekend breaks, etc. and these may be seized.

    Currently we are waiting for the government to define exactly what a ‘primary residence’ may be.

  • Peter Davis says:

    Surely the primary residence of the debtor is the developers home.

    The rest are secondary, and assets of the company, as you can only have one primary, so they can be seized?

  • hugh semple says:

    Don’t let them take peoples houses back if the banks’ developers had not been and still are so greedy corrupt it would never have happened give people a new fairer mortgage to try to save their homes.

    and sort the mis-selling of the Swiss mortgage out refund everyone now

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