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Foreclosures bill in the balance

The future of the foreclosures bill, which has to be passed before Cyprus receives the next tranche of the island’s bailout, hangs in the balance as ministers continue discussions with political parties.

YESTERDAY the Cyprus Finance Minister and the Minister of the Interior continued their discussions with political party leaders on the foreclosures bill in efforts to seek its endorsement by parliament.

However party spokesmen said they still had reservations about several provisions in the bill and warned that they would vote against it in its present form.

Speaking with the state broadcaster after the discussions, Interior Minister Socrates Hasikos said that considerable work has to be done on the bill to change a number of its original provisions.

Hasikos warned that the bill has to be passed by parliament before Cyprus receives the next tranche of the island’s bailout saying that the government only has enough money until the end of November.

Tomorrow (Wednesday) the ministers will meet with the main opposition party AKEL, the Citizens’ Alliance and the Democratic Party (DIKO), which has enough seats in parliament to tip the balance either way.

The last meeting will be held on Thursday with the European Party (EVROKO).

We understand that the Troika of international lenders has asked to be informed daily of the positions of the political parties and other stakeholders over the bill.

Meanwhile approximately 15 organisations that are against the bill have held a joint meeting and elected a steering committee; a joint declaration and a program of demonstrations will be presented at a press conference on 12th August. A mass rally is planned to be held in late August/early September depending on when the bill will be presented to parliament, according to the secretary of the Pancyprian Federation of Labour (PEO ).

Gold News reported on an interview that had taken place between John Houican, CEO of the Bank of Cyprus, and the ‘Kathimerini on Sunday’ in which Mr Hourican made it clear that repossessing mortgaged homes is not the bank’s priority, nor will money reaped from home auctions ever be a source of profit for the bank.

“What we aim to do is provide loans to those who can bring in regular payments. We’re not becoming a repossessions company,” he stressed.

Instead, Hourican clarified that the foreclosures legislation affords the bank the opportunity to target debtors taking advantage of legal loopholes in the system, and who are refusing to pay.

Reiterating his commitment to preventing mass sell-offs, the bank’s CEO underlined that protecting vulnerable groups is – and will remain – a key concern.

Readers' comments

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  • MartynG says:

    Interesting that, outside this forum, little if anything seems to be being said publicly about Developer Loans being secured on the same properties as ‘owner/occupier’ mortgages, frequently with the DLs having prior ranking over the poor unfortunate Purchasers who it seems have been oblivious (not told?) about these highly unusual, not to mention unethical practices, these collaborations between banks, developers and lawyers.. Yes I see the odd reference to Developer Loans as part of the NPL monster, but apart from this, virtually nothing. When are these outrages going to be addressed? What programmes does the all-powerful Troika suggest are implemented to ensure innocent purchaser are not robbed or compromised in any way?

  • Stuart says:

    It’s not surprising that the banks are reluctant to act as repossessors of mortgaged property offered as collateral on non-performing loans, since they clearly do not wish to be saddled with thousands of properties which no-one wants to buy.

    This then would appear to defeat the object of clause 1.5 of the 2013 revised MoU in which the Troika insists on repossession legislation being introduced by mid 2014 and the subsequent gradual elimination of the enormous backlog of NPL’s.

    Targeting a handful of debtors who are exploiting legal loopholes in the system is hardly going to qualify Cyprus for the next tranche of bailout funding.

  • Mike says:

    You could write it as a play couldn’t you. The bombastic statements and denials of responsibility together with the platitudes explaining the fears that innocent foreign buyers and Cypriot families together will be at risk of losing their homes will continue on radio and TV until the 11th hour. Actually making the bold and courageous decisions to address the problem and cause of all this nonsense cannot be taken without upsetting political friends and supporters.

    Protecting the culprits will at least extend political life and privilege, the population will moan a bit but soon get over it. Politicians will be generally seen as blameless, the big bad Troika will be vilified and the object of hate and those who caused the problems in the first place will reap the bounty and profits on the back of the taxpayers misery. No change there then!

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