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Thursday 22nd October 2020
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No apologies for foreclosures

Bank of Cyprus CEO makes no apologies for foreclosuresIT IS high time borrowers in Cyprus started meeting their obligations when it comes to their loan repayments, Bank of Cyprus CEO John Patrick Hourican said yesterday as he announced that foreclosures on property – including homes – were set to begin in May.

Speaking on the side-lines of a Wealth Management Forum at the bank’s Nicosia head offices, Hourican told reporters that homes would be foreclosed but that vulnerable groups would be protected.

“There will be foreclosures we will not apologise for those. We will be careful to make sure that we don’t go after those in of society that deserve our protection,” he said.

“We will foreclose on properties including houses but we will be very careful as to make sure that we are foreclosing on those that have been uncooperative and deserve the procedure.”

According to the CyBC, luxury homes would likely bear the brunt of the foreclosures, with the first ones expected in May.

“You must remember that the offended party now, in this, are the owners of the bank who are the depositors who paid for the bailout,” Hourican said. “We must protect their money we must get society back meeting its obligations.”

In his speech to the forum, he outlined the necessity of foreclosures’ legislation as the basis for the ‘correct attitude’ when it comes to loans and their repayment.

“We have to be cautious, we have to be focused …we have to continue the reform programme, we have to get our NPLs down,” Hourican said.

However he expressed optimism when it came to Cyprus’ progress so far under the condition that reform efforts exerted over the last three years continued.

If they did, he said, the island would eventually recover its losses.

While broadly speaking, he said markets across the globe were vulnerable he added: “I don’t just want to be negative because at the same time, Cyprus is recovering. The country has made huge steps, the GDP is satisfactory, there are opportunities arising from developments such as tourism…”

“What I believe is that real opportunities lie in Cyprus.”

In a separate development the Borrowers Association head, Costas Melas, sought to seek party support yesterday as foreclosures for cases dating prior to 2011 were set to get in motion.

Following discussions with the Citizens Alliance and EVROKO, Melas sought to reassure the public and said foreclosures of primary property was out of the question.

“People should for now, not be concerned with the matter of foreclosures. People shouldn’t fear that tomorrow, or the day after or in a year their homes will be taken. This is not going to happen. If they start to do that, borrowers are ready to face this.”

His requests include improving the rate of loan restructures.

With both political parties extending their support, EVROKO head Demetris Syllouris said it was time parties should focus on real problems “to finally allow the banking system to properly operate”.

Melas also sought to appeal for stripping ‘abusive clauses’ in loan agreements and a transparent attitude from banks when it comes to interest rates, allowing the public to know the real cost of their loans.

No foreclosures on primary residences

When asked to comment on John Hourican’s statements at a press conference, DISY president Averof Neophytou stressed “There is not going to be any sale of primary residence in Cyprus. End of story. Let’s not create insecurity on this issue”.


  1. @editor

    Absolute statements are by definition absolute.

    When asked to comment on John Hourican’s statements at a press conference, DISY president Averof Neophytou stressed “There is not going to be any sale of primary residence in Cyprus. End of story. Let’s not create insecurity on this issue”.

  2. I wonder how many mortgaged properties will now become the primary residence – is there a definition for that?

    Also, the property owners who can well afford the repayments, but have never paid a cent in interest or principle for mortgages on their primary residence can continue to pay nothing and wait for the amnesty when they will get off scot free.

    (Editor’s comment: There is no amnesty and the threat of foreclosure will result in strategic defaulters [those who can pay but refuse to do so] coughing up. A primary residence is where a person lives for most of the time.)

  3. I think there is a burning need to very quickly ‘balance the boat’ in the media. We need to ensure those of us caught up in the bank’s mis-selling misdeeds are adequately represented.

    Neither John Hourican (or any other representative of the banking sector) have been completely clear who they intend to classify as ‘vulnerable’.

    If we are not extremely careful – the media will quickly demonise ANYONE with NPLs and the banks will be represented as the victims.

    From there – it’ll be a frighteningly short step to accelerated foreclosures passing assets back (most probably) to the very people who created this mess for a tiny fraction of the value of their ‘mis-sold’ price. Huge profits to be reaped by the unscrupulous and the greedy (a familiar old story).

    2016 is a pivotal year – best not waste it.

    (Editor’s comment: Vulnerable groups are those who cannot maintain their loan repayments as a consequence of the collapse of the island’s economy. These people can go to arbitration.)

  4. Still no admittance of any sort of wrongdoing by the banks. No mention of mis selling when it came to Swiss Franc or other foreign currency loans.

    No mention of irresponsible lending to developers or members of parliament who gave personal guarantees. The price that a repossessed property will raise after taking out the expenses and the downturn in the market value set against the loan given, will be negligible. I think this is more of an exercise to try and scare people. If I was a shareholder of the bank I would be watching the figures very closely.

    These properties will be sold on a cash basis. With no guarantee how long it would take to obtain title deeds only a fool would invest, given the bad publicity Cyprus has racked up already.

  5. Once these foreclosures come to the auction room, I can’t see the banks selling without a reserve price, I am sure they will have a high reserve making these auctions more expensive than buying clean property from the market.

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