Foreclosure warning letters on the rise

LETTERS sent out by banks in Cyprus to borrowers who fail to pay their instalments are on the rise warning of the imminent foreclosure of properties, according to information from the Cyprus Central Bank.

Warning letters sent between January and June of 2019 concerned a total of 1,971 properties – mainly plots of land and agricultural fields.

The Central Bank information, which was recently sent to parliament, also shows that out of the 1,971 notified properties, 266 have already been sold.

Concerns raised by political parties over foreclosures mainly focused on primary residences. However, out of the 266 foreclosures that took place during the first nine months of 2019, only three concerned primary homes.  And in the third quarter, only one primary residence was sold at auction for €154,000.

During the second quarter of 2019, two primary residences were sold worth a total of €1.71 million. An increase in foreclosure warning letters sent out in the third quarter of 2019 concerned mainly the ready/under-construction home/apartment division with the number totalling 216 compared to 137 in the second quarter.

Warning letters for the sale of land totalled 101 in the third quarter compared to 54 in the second, while letters for the sale of agricultural fields were 374 in the third quarter compared to 244 in the second quarter.

The Central Bank information also shows that the outcome of properties sold by banks at a second auction during the first nine months of 2019 is poor; only 21 apartments and plots were sold.

Banks buying foreclosure auction failures

The banks seem to be buying more properties following unsuccessful auctions than the number of the foreclosed ones they are putting up for sale.

In the third quarter of 2019, banks bought a total of 196 properties compared to 171 in the second quarter and 219 in the first quarter. I.e. they bought 1,119 properties and sold only 266.

The majority of properties purchased (107) are plots and fields, 20 are houses/apartments, 20 are commercial properties, 6 are primary residences and 13 are other properties.