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Waiting for the fat lady to sing

The ECB has yet to decide whether the foreclosures legislation passed by MPs earlier this month is sufficient to enable a review of the Cyprus Economic Adjustment Programme to be concluded.

Waiting for the fat lady to sing on foreclosuresTHE troika of Cyprus’ international lenders have yet to decide if recent changes to the island’s insolvency law are enough to allow an outstanding review of its aid programme to be concluded, the European Central Bank said on Monday.

Earlier this month, lawmakers in Cyprus approved legislation governing foreclosures, paving the way for the island to join the ECB’s sovereign bond-buying programme. But the ECB said no final decision had been taken as to whether the Cypriot action was enough to meet the terms of its aid-for-reform programme.

“The three institutions (International Monetary Fund, European Central Bank, European Commission) are currently in Nicosia and reviewing the detailed information on the insolvency frameworks and other laws that the Cypriot parliament passed,” said a spokesman. “A final assessment on whether recent actions suffice to close the current review has therefore not been taken yet.”

Foreclosure warning letters

Meanwhile the commercial banks and the cooperatives have started sending foreclosure warning letters to defaulting borrowers whose loans are secured by mortgaged property.

The letter calls on the debtor to notify the bank if they have problems maintaining their loan repayment and advised them of their right to restructure the debt.

The provisions of the Property Transfer and Mortgaging law require that any letter sent in connection with a default or demand for mortgage repayment must be accompanied by a notice warning customers, that unless a mutually acceptable solution to their debt restructuring is negotiated, procedures to sell the mortgaged property will be instigated.

Readers' comments

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  • Scruffy says:

    I think the last few comments are somewhat pessimistic. The government has already said that they will protect those who have paid at least 80% of their house purchase price but found hidden mortgages. They are waiting to find out the scale of the problem before bringing in legislation.

    In my estimation, if they had no intention of doing something to resolve the situation then they would have just kept on doing what they have done from the beginning, which is nothing.

    They have been forced at last, to come up with solutions.

  • John Swift says:

    I Have said this before that the owner/dictator of a certain Cyprus forum who has a relative in the Cyprus building industry has a lot to answer for because until the issue of Title Deeds came up in front of the “EU” he stifled the talk on the dangers of not receiving your title deeds when your equally corrupt solicitor completed the sale transaction without securing the said title deeds.

    Any reference to title deeds on his forum was met with comments such as “Not that old chestnut again”.

    He has a lot to answer for.

  • UBoat says:

    @steve R
    Totally agree there ….
    I think the fat lady sung quite a while ago …. sorry to say

  • Steve R says:

    By not issuing the title deeds the properties remain part of the developer portfolio. If a developer has several loans attached to these sites and refuses to pay or has become bankrupt then these properties become an important company asset. If the bank decide to repossess the properties then any specific performance becomes in favour of the bank. All the bank will be interested in will be to recoup the value of the developer loan. The revenue will take priority over the bank and any unpaid taxes or VAT will be taken first. The banks are next down the pecking order. The receiver and the solicitors are next to take their bit and if there is anything left (which I doubt) it will be shared amongst the rest of the creditors.

    What I am getting at is that the banks or anybody else would not be in a rush to help with the issue of title deeds.

  • UBoat says:

    Sorry to say I can …..
    I bet they are putting 100 percent effort into working out how to avoid the MOU as we type ……

  • Stuart says:

    Since the government is responsible for implementing the actions agreed with the Troika and seems to have made little (if any) progress on several key requirements of the MoU, due in part to the obstructive behaviour of its opposition parties, it could be quite some time before the fat lady has anything to sing about.

    And what song will she eventually choose to reflect the historic dysfunctional behaviour of the Cyprus government over the many years it has taken it to tackle the types of issues raised by Pippa and referred to in the MoU?

    I suggest that a good choice would be: “It’s my Party and I’ll lie if I want to”.

  • @Pippa on 2015/04/28 at 4:10 pm – The government is responsible for implementing the actions agreed with the troika. The troika checks what progress has been made as part of its formal review process. I can’t envisage this vitally important matter being brushed under the carpet.

  • Pippa says:

    @Nigel,

    As this is part of the MOU, as you have said, why is no one in the Troika set up responsible for insuring the implementation of the requirements? What happens if the government does not complete this section before exiting the MOU or as I suspect is it going to be brushed under the carpet and are we property buyers going to be left hanging out to dry?

  • @Pippa on 2015/04/28 at 1:04 pm – No, it isn’t too much to ask; these types of issues are referred to in the MoU:

    The Task Force on registered, but untitled, land sales contracts will, by end- September, finalise a study assessing the magnitude of registered, but untitled, land sales contracts and underlying mortgages, in close cooperation with the working group reviewing the issuance of title deeds under the MoU provision 5.3. Based on this assessment and the recommendations developed so far, the Task Force will coordinate the work of the authorities involved and develop, by end-October, an action plan addressing at least,

    (1) the removal of administrative hurdles for the transfer of title,

    (2) the provision of tools to encourage the release of encumbrances on properties to facilitate title transfer, and

    (3) the development of contractual standards for land sales contracts and connected loan and mortgage arrangements.

    By August 2014, create a working group under the responsibility of the Ministry of Interior, which, in close cooperation with the Task Force on title deeds under the MoU provision 1.31 and the Task Force for Growth, will review and streamline all procedures leading from the planning permit application to the issuance of title deed.

    This working group will also provide the necessary assistance to the Task Force on title deeds under the MoU provision 1.31, to allow for a quantification of this problem. By Q3-2014, submit for consultation with programme partners a report with recommendations on how to streamline these procedures, including a catalogue for tolerated deviations from building and planning permits as well as binding deadlines for each of those procedures and means to enforce them, with a view to their implementation by Q1-2015.

    It seems as if the government has made little (if any) progress on the above. Hopefully the troika can exert some influence to get them to pull their fingers out.

  • Pippa says:

    I suppose it would be too much to ask or expect the Troika to do anything about the Title Deeds scandal while they are at it, as for those of us who have paid for our property in full and are living on half finished developments with no sign of the developer and no certificate of completion, as well as no title deeds what is the hope of anything being done?

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