TOUGHER rules on insolvency and non-performing loans (NPL) were agreed at yesterday’s plenary meeting of the Cyprus parliament that will facilitate the fast tracking of 5,373 foreclosures for which notifications letters have been served since the third quarter of 2015.
Under the revised legislation the banks are preparing to foreclose on 183 primary homes, 939 second homes/apartments, 524 commercial properties, 17 hotels, 828 plots of land, 2,812 fields and 70 other properties.
Also included are other properties for which a first auction date has been set comprising 54 primary homes/apartments, 414 secondary homes/apartments, 258 commercial properties, 34 hotels, 408 plots of land, 1,641 fields and 30 other properties.
The revised NPL law will help the banks to better deal with strategic defaulters – i.e. those who are able to pay but refuse to do so.
The new fast track procedure includes the ability to foreclose though e-auctions.
Performance of the present foreclosure law has been very poor. Although banks have sent many thousands of notification letters to defaulting borrowers only 3.2% of the properties have been foreclosed.
With the changes approved yesterday NPLs of €20.6 billion of which half are considered terminated and could be subject to immediate foreclosure.
Assuming that the banks keep to their word, the changes to the law will enable trapped buyers who have purchased in good faith and without any deception or fraud to get finally get a Title Deed irrespective of whether the developer owes the bank money.