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Driven to poverty by Swiss franc loan

A British woman who bought a property in Cyprus with a Swiss franc loan and who is now swamped in a mountain of debt after her partner left and the loan repayments almost quadrupled speaks to the Cyprus Mail.

Swiss franc loan victimA BRITISH mother living in Paphos, another victim of the Swiss franc mortgage mis-selling scandal, has issued a desperate plea for help after being swamped by a mountain of debt caused by a property purchase under the scheme.

Laura (not her real name) contacted the Sunday Mail as she felt she has nowhere else to turn and her current situation has left her feeling hopeless.

“I feel like I’m drowning and I shake uncontrollably when I think of the mess we are in,” she said.

Thousands of British buyers were caught up in the Swiss franc mortgage fallout and in January 2017, another victim, Philip Davies, last year tragically took his own life, just hours after receiving notification that Alpha Bank had re-opened legal proceedings in Cyprus for a Swiss franc loan he had taken out and could not keep up with.

Many foreign buyers, including Davies and his wife, and ‘Laura’, couldn’t have imagined their dream to own a property in Cyprus could result in the nightmare it did.

“People like me were sold a dream home in a beautiful country with supposed manageable monthly mortgage instalments. My repayments nearly quadrupled,” Laura said.

Laura bought a property in Cyprus with her now ex-partner from a large developer where she worked at the time. They guided the couple to use Alpha Bank and take out a Swiss franc interest-only mortgage for five years, she said. The developer also helped the couple by standing as a guarantor.

The couple had a child but later separated, the Swiss franc collapsed and the pair’s repayments shot up from €400 to €1,400 euros a month. Laura’s employers made her redundant leaving her, now a single mum, unemployed with a huge mortgage she could no longer pay, she said.

Wanting to tackle matters head-on, she met with the bank and explained her situation. It was agreed that she would pay only the interest on the mortgage until she was back on her feet. This amounted to €800 a month.

“To implement this, the guarantors needed to sign, as well as my ex as his name was on the mortgage. They could continue this agreement yearly only if the other parties continued to sign the mortgage re-structure,” she said.

Communication between the couple soon broke down and her ex refused to sign any further mortgage restructurings. Instead, he informed Laura that he wanted nothing more to do with the property as he had simply “moved on”.

The debts began to build up, and Laura, as a single mother, was not earning enough to cover the huge cost of the property, which included common expenses. She had remained living in the house with her child, she said.

Subsequently, Alpha Bank threatened legal action and Laura’s ex requested that she and his child move out as he was going to sell the property – there were no title deeds available either – or rent it out.

Laura moved out and rented a new place “and had a small period of happiness until we received a summons to court from the bank stating that the common expenses project committee were taking us to court,” she said.

These two cases have been ongoing for around four years.

The mum of three is currently living in a Paphos village with her new partner who is only earning a minimal monthly wage and along with her child-welfare payments, she said the amount is just not enough to cover what has to be paid out every month. A large chunk of money has to be set aside for lawyers’ fees and car payments, she said.

“We basically rob Peter to feed Paul.”

Despite forking out thousands of euros in lawyers’ fees the case has still to get underway in court, as Alpha Bank have continued to change their lawyers and the developer has changed its name, she said.

A separate court case concerning unpaid common expenses, which has accumulated into thousands of euros, is also proving both lengthy and costly, and although Laura has offered to try to clear the outstanding debt with monthly payments, she said this was rejected.

“I was informed that the residents committee want to use me as an example and want payment in full which I really don’t have. I have no assets, I literally have the clothes on my back which they are welcome to if this will help see an end to all this misery,” she said.

The expat is now painfully thin and said she had reached rock bottom.  Laura is well respected in the community and as a volunteer is always helping others, and despite her predicament, continues to do so, however, she has kept her dire situation from most, ashamed of the tangle she is trapped in.

“Our rent is €400; an old car loan is €200 a month and lawyers are costing €300 a month. I can’t get the children to and from school without a car and a judgment will be taken against me in court if the lawyers aren’t paid, due to the problem with the mortgage.”

Some weeks things are so bad that Laura is unable to buy kerosene for her heater so the family is at home wrapped up in layers of clothes. She manages to eke out what little food they have to last as long as possible and often foregoes eating properly herself in order to feed her children.

Laura said she is suffering extreme levels of stress and her ‘heart stops’ every time the phone rings. She has even made enquiries about declaring bankruptcy but was informed it would cost around €3,000 euros and even then she might be refused.

“I really need some proper legal advice and some help as I struggle to feed my children every month. I feel like I am alone and constantly hitting my head against a brick wall, surrounded by people that all want money from me which I simply don’t have.”

Laura is also currently struggling to clear an unpaid electricity bill, and the EAC has threatened to cut power unless the outstanding €200 bill is paid.

If you would like to help Laura and her children, please contact the Cyprus Mail.

Readers' comments

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  • Robert Briggs says:

    Regarding the feasibility of this Lady getting out of this Swiss Franc mortgage & having these unfair debts written off by this Alpha Bank.

    When *she and her partner were duped into taking this Swiss Franc mortgage, were they denied their rightful Title Deeds due to the fact that covert loans were / might have been taken out by the developer & who is the developer?

    So the lender has the Title Deeds as collateral without the buyers knowledge, so what was *their lawyer/s doing & who are these lawyer/s?
    Were *they informed both verbally and with a clear plain English Document regarding the risks of using an overseas currency due to the grossly fluctuating exchange rates in relation to the £ stg?

    Did the Alpha Bank officials & their solicitors involved check that the developer might have taken out separate hidden loans on this *couples “property” before granting this type of mortgage?

    Did both sets of lawyers carry out all the necessary searches from the beginning & who are these lawyers involved? also who were the sales agents involved in this disgrace?

    So perhaps this **S.F. Mortgage Contract might be invalid due to the above issues & the *Lady might due for compensation due to being mis-sold this **rubbish.

    Anyway “at the end of the day” if there was an issue with the Title Deeds, technically and maybe legally, this property would still in the absolute ownership of the developer and / or the Lender ( say; the Alpa Bank itself?) Therefore no matter how much money you handed over to this bank, you would never own this property?

    So why be encumbered with this hideous crippling debt, if you don’t stand a chance of owning this place.

    So perchance the best course of action due to circumstances beyond this Lady’s control, is to hand the keys over to ’em in lieu of these debts and they can like it or lump it! RB.

  • John says:

    Anybody out here any idea of likely Legal costs to take ones CHF mis-selling case all the way through the Cyprus courts? I have heard costs of up to 20k Euros banded about?

  • Nicholas says:

    My heart goes out to Laura and everyone affected by the mis-selling of these loans by the greedy banks in Cyprus. Me included. its a nightmare. I am ashamed of the Greek Cypriot government let alone also ashamed of the European union. The country will always be tarnished as corrupt Unless it takes responsibility for the mess it caused. The E,U must be aware however do they really care i ask ? obviously not. does the government of Cyprus Care hmmm. certainly does not seem like it. People have resulted in suicide. and still they all sit back. Judges in Cyprus Are probably also corrupt as these cases are not getting to court for whatever reason. Or they may be not corrupt, it could be because a good Judge is going and knows they will be the first to set a president against the banks in favour of the Buyers. However that is there job right? to make sure Justice is done. What are they scared of i ask. The banks caused this mess and have destroyed peoples lives does anyone care. The banks know its there fault. I was offered a 10% discount on my mortgage although to get this i also had to sighn a paper stating i would not claim against the bank for mis-selling. i ask for this in writting to which i was told they are not allowed to give it in writing. well if that is not corrupt and guilt of knowing there were in the wrong I dont know what is. They need to be made to pay. Just like a robber a gangster Now in Cyprus The banksters are walking free. hmmm. and killing people.

  • Aggis Demetriou says:

    Anyone with a CHF loan should stop making monthly payments, and anyone without a title are in a good position as their developer would had given a bank guarantee for the loan.

    I believe the government has purposely stopped these cases going to trial as the banks will lose, simply on the bases “the banks involved in selling the CHF didn’t actually buy the CHF on the day they sold the loan, plus many other valid reasons why they will lose.

    My Solicitor has taken on my case for a maximum legal fee of €3,000 and that’s from start to finish, if anyone is being charged more should drop their lawyer, chances are 99% of these cases will never make the trial.

  • GerryHead says:

    My heart goes out to ‘Laura’ I can’t imagine the pain and stress that she is undergoing.

    What I don’t understand is; if the Developer stood as guarantor, then why is nobody pursuing them for repayment of the debt? That is the whole point of becoming a guarantor or am I missing something?

  • Richard says:

    @Tojo. The E.U have been useless. All they care about is the banks balancing their books (by fair means or foul – 90+% usually foul) and making sure they get their fiscal contribution to the E.U’s central coffers at the E.C.B.

    The E.C.J have been about as much use as a chocolate teapot and we all remember the utterly useless and unhelpful commentary on the situation from Valerie Reding some years ago.

    E.U politicians will be about as much help here as the likes of British ones like William Hague (who gave loads of military land concessions to the Cyprus government without asking for a single shred of help for the thousands of his own citizens trapped in these property ‘deals’ in return). Sadly – a great many politicians (apart from a dedicated minority) are largely self-serving, self-aggrandising snakes.

    We are largely on our own – and anybody committed to fixing their problems need to get together and get coordinated. This (and only this) will make a difference.

  • Tojo says:

    As despicable as the banks behaviour that highlighted is and the failure of the legal system here, no one who has had any experience of buying property, dealing with the banks and disputes all combined in Cyprus will be even slightly surprised of this poor ladies plight and experiences.

    The whole situation is driven by greed and until those in power decide to act then nothing will change and Cyprus will continue to be a tarnished ans corrupt place, is that how it wishes to be perceived? How odd to see this all happening in the supposedly civilised and caring EU too.

    Hopefully the lady will find a way forward that lets her live in peace.

  • steve r says:

    Alpha Bank are a law to themselves. Rulings in other countries will have no bearing on any decision the bank make. By making this woman an example they hope to scare other borrowers into making payments. The fact that Alpha Bank have left this matter for over 4 years without taking it to court just shows that they will not gain anything by going down that route. All they do is to keep sending the threatening letters. They can not repossess that property because it is worthless. No title deeds equals no sale.

    If this woman is as poor as she makes out then let Alpha Bank do their worse. All she is doing is throwing good money after bad. Do not pay out thousands of pounds to go bankrupt. Let them make you bankrupt. Do not go without the basics in life to fund a worthless exercise. The only people to gain from this are the lawyers, as usual.

    Do as your ex partner has done and move on. Treat this as just a chapter in the book of your life. You are in a no win situation.

  • Janice says:

    Tragic, as are many CHF cases! However, it is cruel and sadistic too, as it sounds like the bank (and residents committee) are deliberately causing all this stress for literally nothing, as they are unlikely to recover any funds seeing as the victim has no assets. It is said that chronic stress accelerates ageing, and so shortens lives.

    If this ever goes to court, the bank should not only be paying back all losses – but compensation too for all the stress (at least)! In the meantime, with having no assets to lose, Laura should not be overly concerned – as the bank is probably directing their action primarily at the ex partner, before finally writing off.

  • Deanna says:

    If the ‘Developer’ was her original Guarantor, then surely he is responsible now?

  • Chris says:

    This is a terrible story and I feel so sorry for “Laura”.

    I have been a relatively lucky one in this whole scam as I have been able to meet my mortgage payments, even though they have gone up considerably since 2008.

    I now have less than 3 years and €60k left on the Mortgage, so at least I can sleep at night knowing the nightmare will soon be over.

    I recently wrote to Alpha Bank to see if they would accept a settlement of €30k citing the cases in Slovenia and Greece, but they refused:

    “With respect to your email dated 05/02/2018, please note that the Bank rejects all and any allegations of wrongdoing on its part and states that it has at all times acted in good faith and in accordance with all applicable laws and banking practices.”

    I’m resigned to now having to pay off the entire hugely inflated amount.

    But as I said, I’m a lucky one as I can manage the payments.

  • paul says:

    travel to the uk and make yourself bankrupt.

  • Linda Blake says:

    Hi Ed these court cases are taking forever to come through and for those of us who are in the same position as Laura and I am sure there are many of us (myself and my partner are both of retirement age I’m 71 and my partner is 65) are still having to work because of our situation and being hounded by Alpha Bank constantly as we are unable to pay for Lawyers fees. All our savings are gone and yet Alpha Bank still pester us. We too are at the end of our tether. I have sent our statement of liabilities and assets to the bank which just show my part-time job and pension and my partner’s pension as he has been out of work for two years and yet they are still demanding 4000 Euros a month! No they have no conscience!!!

  • ron richardson says:

    why has it taken so long ,over 10 years and we have still not got these cases to court a disgrace .we have been lucky in that we managed to find a way through. we found our mortgage had gone from 800 gb pounds to 1780 gb pounds a month. yes we wondered many times could we dump it .and get our lives back .we used solicitors ,they just gave us more bills to pay . and then had the cheek to try and charge us again to renew last years fees. so we had to dump them . the Bank of Cyprus gave us an offer 10% off our outstanding or 20% off if we paid up in full .so we remortgaged with a uk bank .at least we could settle and leave that nightmare behind .its been a very bad investment . but we do still own the property. at the moment its cost us £375k to own a house we could maybe sell for about £200k. yes a nightmare indeed. so I know where this lady is coming from . what should happen is these agreements should be cancelled and the properteys returned to the builders like 9 years ago

  • Richard says:

    The truthful answer to the question you pose John is no, they don’t. But, if the government has little or no conscience it’s nothing whatsoever compared to the psychotic & sociopathic indifference of the banks.

    It’s the banks who ‘hedged’ their funds in CHF. It’s the banks who mis-sold their products and then denied doing so. It’s the banks who have steadfastly refused to cooperate with their clients. It’s the banks who (primarily) are to blame in architecting one of the worst and cruellest scams in living history.

    Before the western world’s fiscal collapse we generally treated bankers with historical respect and a modicum of trust. Maybe, perhaps – back in the days before de-regulation when they all had to conform to the Glass-Stiegel act and were (effectively) acting as mutuals – they deserved it. In the last 25-30 years – all of the controls and regulations have been removed – and bankers have morphed into the most ghastly form of predators – displaying traits on occasions that are (really) sub-human. They deserve no respect. Ordinary people are (effectively) now mostly at war with them. They are out of control and this needs the most urgent corrective action at all levels – through community – through government – through constitution. Crypto-currency was set up to counter them – but like most inventions – that’s been hijacked by the criminal fraternity too – as a means of laundering money around the world undetectably (which probably explains it’s recent meteoric rise in value). It’s a very sad situation.

    There are many Laura’s, and I suspect there will be more Philip’s – unless something powerful and decisive is done – and soon.

  • John says:

    Don’t the Cyprus government have a conscience here! They an absolute shambles to allow this poor woman to suffer due to the greedy Cypriot bankers!

    Ed: There have been some positive decisions by courts in Slovenia and Greece concerning Swiss Franc loans. You may have also read about the CCPS imposing administrative fines on Alpha Banks & Bank of Cyprus over their loan agreements. Hopefully when cases of alleged mis-selling are heard in Cyprus later this year, the courts will rule in favour of the buyers.

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