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Friday 10th July 2020
Home Legal Matters EDEK wants to freeze all repossessions

EDEK wants to freeze all repossessions

EDEK wants to freeze all repossessionsSOCIALIST EDEK plans to table a legislative proposal freezing all repossessions by banks, ostensibly to protect vulnerable homeowners, despite assurances from the banking sector that to date not a single primary residence has been foreclosed on.

The party unveiled its intentions on Thursday during a discussion in parliament, picking up from last week.

According to EDEK leader Marinos Sizopoulos, their proposal would suspend all foreclosure proceedings as an extra safeguard for homeowners who won’t be covered by the debt relief scheme known as ‘Estia‘.

The freeze on repossessions would apply until “the whole matter is definitively resolved,” Sizopoulos said.

The party aims to table the bill at next week’s session of the House plenary, the last before parliament breaks for the summer recess.

The ‘Estia‘ scheme – where the state subsidises part of homeowners’ debt – has gone live, although applying for it will begin as of September 1.

Finance Minister Harris Georgiades told MPs that fears of homeowners being evicted are unfounded, recalling that the banks are still obliged to send notices to people who can’t service their debts.

Moreover, the mere dispatch of a notice does not automatically lead to repossession itself, he added.

Georgiades also pointed out that from the moment that a debtor applies for ‘Estia’ any repossessions measures are stopped in their tracks; the process resumes only once someone has been deemed ineligible for the scheme.

The minister reiterated that so far banks have not moved to foreclose on a single primary home.

Last week the Bank of Cyprus, the island’s largest lender, supplied figures showing that over the past 12 months, 921 loan restructurings related to home loans.

In the same time period, the bank foreclosed on 242 properties. Not one of these properties was a primary home.

But EDEK’s Sizopoulos said these data are misleading. To his knowledge, a number of repossessions have taken place on residential complexes with a shared title deed, where the affected individual flats served as primary residences.

There have also been cases where the repossessed property was a parcel of land, but on which a house was later built. However, bank records classify this as repossession of land.

The law on foreclosures was amended in the summer of 2018 to make it more effective, some four years after it was passed by parliament with changes that essentially rendered it toothless and unable to help banks reduce non-performing loans.

Now, opposition parties have drafted five amendments which banks fear would defang the law by enabling strategic defaulters to drag out the foreclosures process.

EDEK’s newest proposal would be the sixth.

The stated purpose of the amendments is to provide vulnerable debtors – essentially homeowners with mortgages they can’t service – additional safeguards. But critics say the law as it stands already provides adequate protections.

The Association of Cyprus Banks has warned that hampering lenders’ ability to recover loans would have the adverse effect of increasing the stock on non-performing loans on their books.

Editor’s notes

What is Estia?

The Estia scheme, which has an annual budget of around € 33 million, sets strict eligibility criteria in terms of the value of the primary residence and income of the borrower to ensure it is targeted at those in need.

Eligible borrowers will receive a grant equivalent to one third of their monthly loan payment, provided that (i) their loans are secured against their primary residence; and (ii) they resume paying the other two thirds of their monthly payment.

If the borrower stops servicing its loan, it is foreseen that the bank initiates the foreclosure of the property. All participating banks will have to restructure the loans of eligible borrowers along the same requirements defined by the State.

Further reading – Estia & repossessions

Cypriot scheme for non-performing loans collateralized with primary residences (Estia) – published by the European Commission 3.12.2018


  1. ‘There have also been cases where the repossessed property was a parcel of land, but on which a house was later built. However, bank records classify this as repossession of land.’

    I should think that the District Lands / Registry office also class these repossessions as land

    So lets protect the ‘connected usual suspects’ who illegally built a home on land without planning permission, did not pay the correct level of IPT for years, did not pay any Title Deed transfer taxes for their properties, and then did not service their loans.

    I wonder which nationality these people belong to that EDEK want to protect?

    Could there be potential votes involved?

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