- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Financial dispute mediation

Financial dispute mediationTHE AGENCY for out-of-court financial settlements said it will start receiving applications on Friday to appoint mediators in disputes between financial institutions and consumers who cannot service their loans in an attempt to facilitate their restructuring.

Financial ombudsman Pavlos Ioannou said that the agency’s mediation will apply in cases of credit facilities of up to €350,000 at the start of the loan agreement for the purchase of a primary residence, provided that none of the parties has resorted to legal procedures or the lender has not initiated the foreclosure procedure and the mortgaged homes are not in receivership.

The mortgage property should have been a primary residence of the owner or lessee for a minimum of six months.

Ioannou warned of high expectations. “Unfortunately due to the huge systemic problems that the financial sector of Cyprus is facing, our compatriots may have excessive expectations,” he said and added that “the result on many occasions are distortions in their strategic decisions in dealing with their mediation problems. We don’t have a magic wand to solve problems”.

Cases brought for arbitration to the agency will take up to a month before they area settled, Ioannou said, while in some cases it will be at the discretion of his office to grant an additional month for the parties to reach an out-of-court settlement.

Mediators will receive a fee of no more than €500, of which 20% per cent will be paid by the consumer, while 80% will be charged to the bank.