InsiderBusinessOn line auctions on the cards in move to tackle NPLs

On line auctions on the cards in move to tackle NPLs

The Finance Ministry is eyeing important changes in the insolvency framework as it looks for more effective ways to deal with bad payers and tackle the mountain of non-performing loans.

According to a letter sent to political parties by the Finance Minister the following changes are on the cards:

– Introduction of online real estate auctions.

–  Banks to be allowed to sell a mortgaged property at 50% of the reserve price if it is not sold at the first auction at a price of 80% of the reserve price.

Afterwards, the Bank is given the right to purchase the property at market value as determined in the first auction or on the basis of a new valuation

– In the case of the auction of a property which is a principal residence, if the borrower has received state funding as a contribution to his debts he ceases to have a privileged status with regard to the last tenderer.

– A framework for quick extrajudicial recovery of collateral by secured creditors will be created in order to avoid future accumulation of non-performing loans.

– Legislation facilitating the sale of loans will be introduced.

– Investment funds that buy loans will be able to access the borrower’s data to the extent necessary to enable them to carry out their assessment.

Read also: 47 cars owned by Bank of Cyprus to be auctioned: prices start at €200

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