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19 June, 2024
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The government's seven proposals for vulnerable individuals

The government stated its intention to strengthen and enhance two legislative proposals submitted by parliamentary parties.

Newsroom / CNA

Finance Minister Makis Keravnos submitted seven government actions aimed at addressing issues related to non-performing loans to Parliament yesterday. In a letter addressed to Speaker of the House Anita Demetriou, the Finance Ministry emphasized that the proposed framework is considered satisfactory and provides a "safety net" for vulnerable groups.

The letter, obtained by CNA, informed Parliament about the approval of an amendment to the Courts (Special Jurisdiction) Law. The amendment aims to regulate the resolution of disputes between borrowers and creditors regarding credit facilities secured by main residences valued up to €350,000 within the District Courts.

The government stated its intention to strengthen and enhance two legislative proposals submitted by parliamentary parties. Specifically, in relation to the AKEL proposal concerning the pricing method in voluntary property-for-debt exchanges, a revised text incorporating recommendations from the Legal Service has been proposed to ensure constitutional compliance. Additionally, cases related to rent versus installment are excluded from the proposal.

Regarding the DISY-DIKO proposal to provide extensive information during the sale procedure, the government noted that it has been enriched with additional obligations. This includes the requirement for mortgage lenders to indicate the dates of sending letters according to the CBC Code to all borrowers, demonstrating compliance with the Code. Furthermore, in cases involving only loans with a mortgage on main residences valued up to €250,000, the mortgage lender must accompany the Type I letter with an affidavit from a statutory auditor or agency confirming the debt amount, with the certification cost borne by the mortgagee.

Finance Minister Makis Keravnos further informed that the Rent versus Installment plan, approved by the European Commission, will be officially adopted at the next Council of Ministers meeting. The plan provides a fair and definitive solution for vulnerable groups unable to service their mortgage loans on main residences worth up to €250,000 at market prices, allowing them to retain their homes.

The letter also mentioned that the government is exploring the possibility of relaunching the ESTIA scheme, tailored to current circumstances. However, its implementation is subject to approval by the Commission to ensure compliance with State aid rules.

Additionally, the Finance Ministry highlighted actions taken to strengthen the staff of the Single Body for the Extrajudicial Settlement of Disputes of a Financial Nature (Financial Commissioner). It further noted that banks and credit acquisition and management companies have suspended the sale of properties involving main residences valued up to €350,000 until the end of October.

"The proposed framework is considered satisfactory for the functioning of the system and provides a safety net for vulnerable groups," noted the Finance Ministry, adding its readiness to present detailed measures and reasons explaining why further diversification and weakening of the overall divestment framework should be avoided.


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