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Hammer time for foreclosures

Around 3,000 foreclosures have been pending at Land registries and thirty auctioneers are polishing their hammers to begin auctioning commercial buildings, holiday homes, and land owned by large debtors.

Cyprus foreclosures imminentAROUND thirty auctioneers are polishing their hammers ahead of the second half of 2016, as bankers set their sights on large debtors.

There are about 3,000 foreclosures in the pipeline which have been pending at the Land Registry Department for years. Banks have been signalling publicly that primary residences are not the target, but they are going after commercial buildings, holiday homes, and land owned by large debtors.

The cases in the first wave of auctions concern foreclosed properties going back to 2010 and have nothing to do with primary residence or severe financial problems.

Cooperative banks are putting properties under the hammer with a total estimated value of €75 million, while the Bank of Cyprus is pushing land and properties based on final court decisions prior to 2013 with a total value of €85 million. Hellenic Bank is also going after big commercial properties, leaving primary residences off the hook.

The Cyprus Banks Association has publicised some of the locations already, but there are still details to be hammered out with other places. Based on law, auction halls must be confirmed in all districts before public sale begins in any of them.

Two location are already confirmed in Nicosia, a conference hall and a multipurpose room at GSP Stadium. Another location in Famagusta district will be in Paralimni, while the situation in Limassol, Larnaca, and Paphos is still unclear after owners had second thoughts or their buildings did not meet standards.

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Readers' comments

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  • Mike says:

    Janice – I wouldn’t think you are being cynical based on past evidence. Perhaps we should all get one jump ahead and take out loans (ensuring they are NPL’s in time) and buy up any cheap deals. I can’t help but feel that a holy mess will result from this policy too, lets hope I am wrong.

  • Janice says:

    OK, I have got it – this is how it works:

    Bank managers do ‘deals’ with ‘cousins’ etc to sell 150,000 euro holiday properties to each other, for 40,000 euros at auction. When prices recover, re-sell at massive profit, all at victim’s cost. Pursue victims for balance 110,000, and use to fund even more knock down purchases.

    Probably all pre-planned years ago when they couldn’t give away loans fast enough – cynical as I might be!

  • Steve R says:

    Can I get this confirmed regarding these auctions and the scenario’s surrounding them. A local individual who has got into financial difficulties whilst developing 6 industrial units has now had these unfinished units repossessed. He borrowed money from the bank, took deposits from purchasers and owes money to the revenues department. His primary residence is now secured under the new laws.

    What is the pecking order for people who will benefit from proceeds of the sale. The individual will be at worse be declared bankrupt. How do they propose to sort out the mess he has left behind.

    (Editor’s comment: I don’t have any further details – but I expect any money owed to the government will be paid out of the sale proceeds, then the bank and finally secured creditors.)

  • Scruffy says:

    At least now perhaps, we will at long last see how effective the “Trapped Buyers Law” will be. Judging by the anecdotal evidence re how the LRs have often misinterpreted the law and criteria for the issuing of deeds, it is not a huge leap to envisage similar misinterpretation of what properties should be subject to auction.

    Very worrying for those of us who are already under foreclosure due to developer debt.

    It is now looking obvious, given the snails pace deeds are being issued, that the speed of auctioning property will almost certainly far outpace issuing of deeds.

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