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20 July, 2024
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Freeze on home foreclosures likely to continue

Two more months of relief in sight for homeowners


As the year comes to a close, it seems likely that the freeze on foreclosures of primary homes valued up to €350k will be extended.

As reported by Philenews, initially imposed by credit buyback companies and banks in July, the freeze, originally set to expire today, appears poised for an additional two-month extension.

This extension is anticipated to remain in effect until the government and co-ruling parties can reach an agreement on a mutually acceptable legal framework for these foreclosures.

This freeze was initially introduced to grant the Ministry of Finance ample time to address the demands of co-ruling parties, including Diko, Edek, and Dipa.

These parties were awaiting the preparation of a bill aimed at bolstering the powers of the Financial Commissioner and enhancing legislation for the establishment of a specialized jurisdiction known as the Divestment Court at the District Court level.

Unfortunately, drafting the legislation has faced significant delays, leading to mounting political pressure on creditors. While credit buyback companies deny such pressure, discussions about extending the freeze persist, and official announcements of the extension are expected soon.

Both banks and credit repurchase companies express concerns about the consecutive suspensions of legislative implementation.

They believe that self-imposed auction freezes are a preferable alternative to legislative proposals, as there's a fear that these proposals might expand the law's scope to include commercial properties or land parcels within the freeze.

MPs from opposition parties are closely monitoring the situation and are prepared to intervene with a legislative proposal if necessary.

Creditors worry that the bill for the out-of-court dispute settlement body in financial matters could effectively transform the Financial Commissioner into a quasi-court, making its decisions binding.

Concerns also exist regarding the Divestment Court, and creditors express frustration over a lack of meetings with the government.

Leaders and representatives of the co-ruling parties met with Finance Minister Makis Thunderbolt, Ministry of Finance Director General George Pantelis, and ministry technocrats to discuss the bill on the Financial Commissioner and special jurisdiction in court.

The co-ruling parties expressed strong dissatisfaction with the government's prolonged delays.

Party representatives demanded changes to the special jurisdiction bill, suggesting it should include borrowers with mortgages on professional properties and land parcels, according to the Philenews report.

They also requested the law to specify a timetable for the special court to render judgments and include a provision to freeze loan interest when borrowers seek justice. The ministry countered that setting a timetable in the law would be unconstitutional.

Regarding the bill to create an alternative extrajudicial mechanism by expanding the Financial Commissioner's responsibilities, officials from the co-ruling parties disagreed with the finance ministry.

They called for changes in the body's organizational structure and the Board of Directors, urging the removal of supervisory authorities' participation to ensure institutional independence.

Furthermore, they requested the removal of certain provisions concerning the Assistant Financial Commissioner's powers and sought clarification on how borrowers can engage with the institution through the law.

The finance ministry assured that some articles would be removed and promised a revised text in the coming days.

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