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MP defends hidden mortgages delay

Cypriot MP Giorgos Perdikis has defended the delay in passing the ‘hidden mortgages’ bill saying that “If they (the government) had wanted the (title deeds) bill expedited they should have asked.”

hidden mortgages delay

Green Party MP, Giorgos Perdikis

INTERIOR Minister Socratis Hasikos had a point when he slammed parliament for not passing a government bill designed to protect house buyers without title deeds, but he was not entirely right, an MP said on Saturday.

Green party MP Giorgos Perdikis was commenting on a scathing statement released by the minister on Friday, berating MPs for not passing the bill the previous day, the last parliamentary session before the summer break.

The bill, submitted by the government late in June, was meant to sort out the mess created by the failure to provide title deeds to people who had paid for their properties, either because it was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

“Whom is parliament trying to protect? Trapped buyers of mortgaged real estate, or the banks,” Hasikos said.

Perdikis said he agreed, the legislation should have been passed on Thursday, but one reason it wasn’t was the government dumping a host of other bills on parliament, with a request that they be passed before the break.

The bills, which include tax breaks and other incentives to attract foreign investment, had been announced just days earlier.

“If they had wanted the (title deeds) bill expedited they should have asked,” Perdikis told the Sunday Mail, adding that they had not done so.

Developers’ land and buildings are counted as assets that need to be offset against their debt to banks, giving lenders a claim on people’s properties that had been mortgaged by developers.

Thousands have been left without deeds as a result.

The bill grants the head of the Land Registry department the authority to exempt, eliminate, transfer, and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.

The director will have the power to transfer mortgages to other property belonging to the vendor. If no such property is available, the director can transfer the encumbrances on individuals who guaranteed the seller’s obligations.

Banks, which are expected to take a hit, had expressed opposition to the bill.

Perdikis said the postponement had been decided by the House Finance and Interior Committees during discussion of the matter at the end of June in a bid to give MPs more time to study the matter.

Hasikos had disagreed with the decision and asked parliament to vote on the bill before the break.

MPs voted instead to extend the exemption of such properties until the end of the year. The previous date was July 10.

At first glance there did not appear that anything suspicious was afoot but Perdikis did not rule out attempts in the autumn to accommodate bank objections.

Editor’s comment

The explanation given by Giorgos Perdikis contradicts an earlier report on Tuesday July 7, which said that the House had no time to examine the ‘hidden mortgages’ bill due to the summer vacation. The bill was delayed by a decision of the House Finance Committee (of which Giorgos Perdikis is a member.)

I understand that the Association of Cyprus Banks is claiming that the ‘hidden mortgages’ bill will cost the banks €1 billion.

Readers' comments

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  • houlou says:

    @Marissa, I think that is why the government is finally coming cleanish and realizing they too had a massive hand in the current mess today…..you will not believe how many persons I have spoken to in the past month who are affected by this issue, even land registry employees!

  • Marissa varley says:

    Another reason to never recommend others to place their hard earned money in Cyprus.

    The Banks should never have given these mortgages in the first place to land that had already been paid for in full by the purchaser, and titles lodged with land registry. That in itself is surely a crime.

    I am disgusted by the whole system here.

  • houlou says:

    More on troika visit and intentions that affect deeds, issue is just dragging on it seems. In ref to below I guess one such incentive is the already reduced transfer fees, but I have a feeling below refers to all those deeds that are trapped….

    Google translation from philenew site:

    By the end of October lenders give room to authorities to propose legal proposals to provide incentives for the rapid transfer of property titles to buyers.

    Αρχίζει η αξιολόγηση από την Τρόικα

  • houlou says:

    Well according to sigma news the troika bunch are here for the 7th evaluation of Cyprus progress, RIK news said its the 8th evaluation, either way a statement by mark lewis the IMF rep in troika said:

    Αρχίζει η 7η αξιολόγηση του κυπριακού προγράμματος

    They will examine the issue of the large quantity of title deeds that have not been transferred and complicate the problem of NPL’s that are in relation to private properties and business properties and mortgages

    Pretty vague if you ask me….

  • Mike says:

    Why would they rush to pass the bill? They have vested interests in maintaining the status quo and their friends the developers must be threatening to remove party and personal funding if they do pass it too soon not to mention their friends in the Banks and the pressure they must be applying – all off record of course. Can you imagine MPs with guarantees of collateral in millions suddenly seeing the value of that collateral dropping to almost nothing. Not something they will be rushing to do I would imagine. Whatever the troika wanted done by whatever date will be ignored anyway – I see it has!

  • houlou says:

    @Nigel and all, Following on from Nigel’s comments, was reported this a.m on RIK that members of troika will be arriving today for talks with the central bank of Cyprus, and more members will be arriving next week…

    Nigel, please book an appointment with TROIKA, to highlight yet again the absurd state of play and conflicts of interest that exist when it comes to the lawmakers and their inability to sort of the title deed mess FAIRLY…….(obviously those in power are not wanting to do anything as they will take a hit as well and so will their banker buddies).

    I am hoping the troika are not just a number crunching lifeless bunch….and are out to actually improve the situation…I say this as in the past there were repeated comments made on the fact that the troika doesn’t actually care where monies for debt owed to ‘them’ comes from, as long as it is paid…not sure where the truth lies?

  • Steve R says:

    Even Dick Turpin had the decency to wear a mask when he robbed people

  • Steve R says:

    Nigel Howarth states: I believe that a delegation from the troika will be visiting Cyprus later this month for their next evaluation of the adjustment programme.

    How would it be possible to expose the findings from this blog to the delegation that are due to visit. If the people waiting for their title deeds were to be issued with them then surely this would go a long way towards kick starting the building trade. Trust may be at last be restored in Cyprus. We all know why this bill wasn’t passed so why can’t the information be passed on to the Troika. Things are starting to be exposed on a weekly basis now and heads need to roll.

  • houlou says:

    Mr. Syllouris is part of the house ethics committee, why on earth he has not been more vocal in his outright support of the trapped buyers bill is beyond me, or could it be that ethics go out of the window when it’s your own pocket that is at risk?

  • @All – Here’s a comment made by EVROKO party leader Demetris Syllouris following the resignation of the former health minister Philippos Patsalis. It sums up the situation very well:

    “When we stumble or neglect to deal with the deep seated status quo in Cyprus, the interconnections and petty interests, we cannot move forward. And this is the huge problem in Cyprus that has led to the economic crisis and does not allow us to develop quickly.”

  • houlou says:

    If there is any doubt about MPs NPLs find figures below, and so the link is clear, the bill would kick them were it hurts if they were to vote it….be good to know how many of them are actually involved in developing and or stood in as guarantors for this despicable species of germs….

    Fury over leak of MP loan list

    The list of 37 members of the 56-seat parliament was published in daily Politis yesterday causing a stink in the political arena.

    It showed that out of the 37 MPs listed, 19 owed the BoC a total of €51.2m and 13 of those had NPLs totaling €35.3m. Their total combined collateral stood at €47.1m. In addition, 20 out of the 37 were guarantors for loans worth €72.9m.

  • houlou says:

    Cyprus: Latest Instalments Of Financial Assistance Released
    Last Updated: 7 July 2015
    Article by Andreas Neocleous & Co LLC
    Andreas Neocleous & Co LLC

    Most Read Contributor in Cyprus, June 2015
    LinkedIn Twitter Facebook

    On 3 July the European Stability Mechanism (ESM) and the International Monetary Fund (IMF) approved the disbursement of the latest tranches (€100 million and €280 million respectively) of financial assistance to Cyprus under the package agreed in 2013.

    Both organisations expressed their satisfaction with the implementation of the economic adjustment programme, and the ESM Managing Director said that, “The legal framework for a new foreclosure procedure has entered into force, and there has also been a substantial reform of corporate and personal insolvency laws. These new regulations enable the country to effectively deal with the problem of non-performing loans (NPL). I trust that the government will continue its reform efforts so that Cyprus can sustain economic recovery.”

    According to the IMF the Cyprus economy grew at an annual rate of 0.2 per cent in the first three months of 2015 after shrinking 2.3 per cent in 2014.

  • @kufrahdog on 2015/07/13 at 10:31 am “Nigel – are you able to throw any light on how you think the Troika could respond and could you share it with us?”

    Looking through the latest revision of the Memorandum of Understanding (18 June 2015), I don’t believe Cyprus has defaulted:

    1.12. Prior to the granting of the seventh disbursement of financial assistance, the authorities will, after taking into account comments by programme partners, present draft legislation to programme partners, that

    • ensures that property buyers who have paid the purchase price in full, will have their title deeds transferred within 6 months after their issuance;

    • puts obligations on all parties involved to ensure that the procedures releasing encumbrances and transferring the title can operate without delay and as automatically as possible; and

    • provides safeguards against abuse, inter-alia by introducing a mandatory escrow account to route all payments related to a property transaction, as well as adequate compensation for the parties involved, if available.

    By end-June, the legislative measures will be adopted by the Council of Ministers.

    Furthermore, the CBC will, in close cooperation with Ministry of the Interior, provide to programme partners a financial sector impact assessment regarding title transfers and lifting of encumbrances by end-June.

    The authorities will propose legal or contractual standards for property sales contracts and connected loan and mortgage arrangements by end-October, as well as further legislative and administrative measures necessary to incentivize the swift transfer of title deeds by end-October.

    I believe that a delegation from the troika will be visiting Cyprus later this month for their next evaluation of the adjustment programme.

  • MikeN says:

    Green Party MP, Giorgos Perdikis:

    “The “the dog ate my homework” excuse never fails”

  • Who Gives says:

    @ Richard Here Here fully agree but can not look back need to look forward where Cyprus will end up?

  • Deanna says:

    It disgusts me he thinks we’d be taken in by this bullshit of ‘extra bills dumped at the last minute’.
    I don’t suppose the Troika will be, either.

  • houlou says:

    Well I just sent an email to the president, that encompassed all the good points made by all readers on the forum

    Contact the President

    Didn’t seem to allow me to do so, as came up with a login request so tried again, no joy, so called the

    Presidential Palace
    1400 Nicosia

    Tel.: (357) 22 867400

    And there a young lady confirmed email had been received twice , I’d recommend everyone here do the same and email him….got nothing to lose have you?

  • Roger says:

    You can see the writing is on the wall, we will have to pay towards the developers debt! I would sooner demolish this villa than pay! It will be nothing short of blackmail, pay and get your deeds, or don’t pay and you get nothing.

    So what, that the banks will take a hit for 1 billion, “how much did they steal” take from people’s bank accounts?

    I’m disgusted by the attitude and lack of any respect for people in this horrendous situation, they have no moral fibre. 14, years I have been forced to live here against my will, where is my human rights? Oh I forgot, I’m living in Cyprus.

  • kufrahdog says:

    The delay is a ploy so that parliamentarians have time to make changes to the proposed legislation that will protect their corrupt and vested interests.

    It is highly likely that the bill will be radically changed in favour of the banks, developers and guarantors and, of course, parliamentarians, who are or who have links with banks, developers and lawyers.

    The question I ask is: Could the Troika withhold funds from Cyprus if this bill fails to support the transfer of title deeds WITHOUT LET OR HINDRANCE to buyers who have paid for their properties in full?

    Nigel – are you able to throw any light on how you think the Troika could respond and could you share it with us? KD.

  • Richard says:

    Interestingly – I’ve just started reading a book called ‘Blink’ by Malcolm Gladwell – which is all about the ability of the human brain to make an instantaneous judgement in seconds which often eerily & precisely matches the same judgement after months (or even years) of careful analysis of data & facts.

    With respect to this property debacle in Cyprus – many of us can trace the point – back in late 2008/early 2009 – where we realised that we’d been roundly duped into Cypriot property investment by the banks, lawyers, brokers and the government. It was a gut-churning moment. And after all of the years of discussions, arbitration, research, lobbying and comment – the same judgement / assessment of the situation remains firmly in place for the overwhelming majority of us.

    So – as many concluded then (in the ‘blink’ moment) we need a fair process of sorting out the mess that allows everyone a decent humanitarian chance to re-set and move on with their lives – whether they choose to continue to have a footprint on the island or leave it for good. We are STILL waiting – nearly SEVEN years on. Meantime – since 2008/9 – many of us know a lot more about how the banks have behaved across the entire globe – and it’s a very ugly picture.

    Time gentleman. It’s time to call time on obfuscating, prevaricating and layering more lies on top of the existing lies you’ve told us all. It’s time to get fair and real.

  • houlou says:

    @Sandra, very well put , couldn’t be simpler as a principle

  • Steve R says:

    Socratis Hasikos
    Remember that name because we probably wont be hearing much of him in the future. He is a brave but very much marked man now.

  • Sandra says:

    It is hard to believe what is actually being quoted there! “They should have asked?” common sense would indicate this matter is more important than fixing tax breaks for foreigners for instance. Do they not realise that people worldwide know what is going on here and who would buy anything until this mess is sorted. As for the banks, they should take the hit. They lent indiscriminately, and now expect home owners to give money that they lent to developers. If they want their money, go to the people who have taken money for property and then spent it instead of paying their dues; i.e. the Developers!

  • Who Gives says:

    @Houlou what is for the MPs to defend here? you could have bet your house on it that this key vote to pass the Law for the issue of deeds to trapped Buyers. Do not want to sound negative but my feeling that come the time to vote on a bill to be passed by the MPs it will have completed changed to protect the Cyprus establishment crooks.

  • houlou says:

    hmmmm 1billion hit?, where were all the MP’s concerns of over the banks when they were approving all the bills to carry on pumping billions into a ‘dead’ Laiki bank?

  • houlou says:

    If ‘they’ are to accommodate the banks in autumn Perdikis says then it must mean only one thing, that status quo of the banks demanding buyers to pay a developers debts in order to release encumbered deeds will continue and wrongly so. I suppose the banks may add water to their wine, and ask the buyers pay some of the debt as opposed to all of it, by why the hell should this be the case? The contracts between vendors and purchasers. I am 100% sure would have made no reference to warning as about mortgages of the developer, and would have no clause saying that by paying me the vendor in full does not guarantee you deeds to the property as if I the vendor fail to pay debts to the bank, these debts will be dumped on you if you wish the deeds to be released !

    If the govt follows suit it will mean they have to carry on trapping buyers again by loading the buyers with the developers outstanding debts to the state if the buyers ever wants deeds….

    As for delaying the repossessions to the end of the year….a nightmare is looming whereby if the govt does nothing to sort this trapped buyers issue out soon, there will be many many buyers who have will be entangled in legal disputes with all parties involved state banks and developers……

  • Pete says:

    If taking the hit now will cost the banks a billion Euros, imagine what it’ll cost them once there’s an honest investigation. The more they prevaricate the more likely it might be for Troika to investigate and there’s a lot of MPs and banks who won’t want that to happen.

  • Carol says:

    I’m afraid that’s tough the banks lend monies quite happily with no collateral and guarantors that could never pay if that is not negligent I don’t know what is. Negligence cost money and it is only fair that they cough up not the people that brought property without being informed by solicitors or the bank that mortgages were already in place.

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