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17 June, 2024
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Parliament to vote on law for borrowers' foreclosure appeal

Industry group aligns with government initiatives on foreclosure issue

The news from the "Oikonomiki Kathimerini" about the suspension of first home foreclosures up to €350,000 until the end of October has been confirmed. According to the report by Panagiotis Rougalas, this "half-measure" is expected to serve as a compromise to allow either the government, the Central Bank of Cyprus, or both to come up with proposals that will effectively address the issue of non-performing loans.

Statement by the Association of Credit Acquiring Companies and Credit Facility Management Companies
The Association of Credit Acquiring Companies and Credit Facility Management Companies (SEDP) announces that its members, following consultation with the government, have decided not to proceed with property foreclosures concerning first homes with a value of up to €350,000 until October 31, 2023.

The decision was made in support of the efforts and initiatives undertaken by the government and the Central Bank of Cyprus regarding the issue of foreclosures.

The comprehensive package of proposals regarding foreclosures includes, among other measures, the suspension of foreclosures until the end of October and the establishment of specialized jurisdiction in the courts for the adjudication of NPL (non-performing loan) cases, as stated by the Minister of Finance, Makis Keravnos.

This package will be presented at tomorrow's plenary session of the Parliament, where a proposed law will be put to a vote, granting borrowers the right to appeal to the courts for an injunction to suspend the foreclosure process. The Ministry of Finance and the Central Bank have warned of a series of potential negative consequences related to this proposal.

"The intention of the government is to submit a comprehensive package for addressing the issue of NPLs (Non-Performing Loans) and foreclosures," Mr. Keravnos stated in his remarks following the Council of Ministers meeting. He added, "Today, we will inform the Parliament in writing, as announced by the President of the Republic, about the package of measures we will submit."

Referring to constructive contacts made yesterday with the Association of Banks of Cyprus and the Association of Credit Acquiring Companies, Mr. Keravnos said, "I expect that an announcement will be issued today stating that foreclosures will be suspended until the end of October."

The suspension of foreclosures will give the government time to present and implement all the arrangements for the completion of the package of measures, which will include, among other things, the diversification of the terms of the Home Plan to include more eligible borrowers, the official approval of the tenant plan against installments, and the strengthening of the powers of the Financial Commissioner.

"This will allow sufficient time for all the necessary actions to be taken in order to ensure a better prospect for this issue," emphasized the Minister of Finance.

Mr. Keravnos emphasized at this point that "the intentions of the government have already been outlined; the intention is not to alter an existing stable foreclosure system, while protecting our economy and simultaneously relieving those groups who are concerned about NPLs, by informing them in the next few hours, tomorrow, with a comprehensive package of measures."

When asked about the draft law on the establishment of special jurisdiction in the District Courts for the examination of financial disputes of borrowers, Mr. Keravnos stated that the government's intentions are to submit a bill regarding special jurisdiction, "in order to ensure faster decision-making on these matters."

He explained that "one of the major problems in this effort is the delay in decision-making in the administration of justice."

In response to a question about whether the concerns of the Members of Parliament will be addressed with this package that will be communicated to prevent the adoption of the proposed law, Mr. Keravnos said that this is our goal, and we aim to convince all stakeholders through the package of comprehensive measures that this is the correct way to address this issue.

Answering a question about whether there will be a memorandum of understanding with the banks regarding the suspension of foreclosures, Mr. Keravnos said that there is no issue of a memorandum of understanding, but there is mutual understanding.

"I believe," he continued, "that both the banks and everyone involved understand the risks if a proper solution is not provided that ensures the protection of vulnerable borrowers while also safeguarding the stability of the foreclosure system."

Finally, when asked if any decisions have been made by the government regarding the Financial Commissioner, whose term expired on June 30, Mr. Keravnos limited himself to stating that the matter is being considered by the government.

Cyprus  |  government  |  foreclosure  |  economy  |  parliament

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