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24 June, 2024
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Critical battle looms as Parliament debates foreclosure legislation

Last-minute negotiations and rebel MPs add uncertainty to fate of key bills

Pavlos Neophytos

Background consultations are in progress to prepare amendments to the legislative package on foreclosures, set for submission to the Parliament Plenary on Friday for a vote. Simultaneously, the clock is ticking for the suspension period of main house sales, following the decision of banks and credit purchase companies to extend it until the year-end.

On Friday, two government bills will head to the House of Assembly. The first aims to establish the Special Jurisdiction at the District Court level, known as the foreclosure Court, and the second expands the powers of the Financial Ombudsman, acting as an out-of-court dispute resolution mechanism. Additionally, two bills proposed by co-legislating parties, safeguarding the rights of mortgage debtors of primary residences, will be presented.

Last-minute negotiations are anticipated to shape the fate of the legislation in plenary, with the possibility of MPs from co-governing parties defecting to the opposition due to additional safeguard demands. The Special Jurisdiction Bill appears to have majority approval, supported by 30 MPs from DISY, DIKO, and PPP. However, rebel MPs within the supporting parties may influence the outcome.

EDEK is preparing amendments for the Special Jurisdiction Bill, focusing on measures from the 2019 legislation withdrawn by the Anastasiades government. EDEK Chairman Marinos Sizopoulos emphasizes three points: employing judges exclusively for foreclosure and financial dispute cases to prevent delays, expanding beneficiary eligibility and raising the value of the main house covered beyond 350 thousand euros, and ensuring completion of case hearings within 90 days with appeals registered within 90 days.

DISY spokesman Onoufrios Koulla states that the legislation appears unproblematic and supports fair treatment of borrowers, with DISY's positive disposition. He emphasizes DISY's responsible behavior and expresses concern about amendments from co-governing parties that could pose risks to the country's economy.

AKEL plans to submit a law proposal reintroducing recommendations from June, emphasizing borrower access to justice to freeze auctions. AKEL, DIPA, and the Ecologists are expected to propose an amendment to the financial commissioner bill, providing access to borrowers with an initial loan amount of up to 350 thousand euros and a main residence value of up to 500 thousand euros. This contrasts with the government's bill, limiting the main house value to 350 thousand euros.

Cyprus  |  foreclosures  |  banks  |  divestments

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