Insider Business Panic over proposed changes to foreclosures law

Panic over proposed changes to foreclosures law

The House Finance Committee yesterday began discussing proposed amendments to the island’s foreclosures law despite frantic calls by the government and the banking industry that the timing is wrong.

Finance Minister Harris Georgiades urged opposition MPs to delay voting on the proposed changes that could weaken lenders’ ability to recover loans and trigger a chain reaction of adverse side effects.

The five proposals were tabled by centre Diko, the Green party, Solidarity Movement and Citizens’ Alliance Movement.

The Minister pleaded that it was best to wait until the fledgling ‘Estia’ scheme, which provides relief to primary homeowners who cannot meet their obligations, kicked in.

And that some time should be allowed for the scheme’s effectiveness to be assessed before tinkering with the law on foreclosures.

Technocrats from the Central Bank of Cyprus and the Association of Cyprus Banks backed the Minister, warning that international rating firms will immediately downgrade the island’s economy if the foreclosures bill becomes toothless.

They also argued that the European Central Bank will negatively review guarantees on borrowers’ loans, while problems will also arise with forecasts by credit institutions.

The law on foreclosures was amended in 2018 to make it more effective, some four years after it was passed by parliament with changes that essentially rendered it toothless and unable to help banks reduce non-performing loans.

A Central Bank of Cyprus representative told lawmakers that currently in Cyprus NPLs account for 30 per cent of all loans, compared to the eurozone average of 3 per cent.

At the same time, a representative of the banks’ Association said concerns that debtors could be thrown out of their homes appear unfounded. For example, he added, to date Bank of Cyprus has restructured some 28,700 loans. Over the past 12 months, only 921 of these restructurings related to home loans.

In the same time period, the bank foreclosed on 242 properties. Not one of the foreclosed properties was a primary home.

Fifty percent of the foreclosures related to undeveloped plots of land, and the rest were villas and commercial properties.

The Cyprus Chamber of Commerce and Industry as well as the Cyprus Employers Federation (OEB) also expressed their opposition to the proposed amendments.

Read more:

 

https://in-cyprus.com/banks-stepping-up-foreclosures/

 

Top Stories

New COVID-19 cases in Limassol cause concern

State services have been alert due to the fact that people from the Limassol Court, the Limassol Municipality and another person from the same...

Illegalities regarding pedestrian path at Peyia Sea Caves (PHOTOS)

The Environmental Authority asked the Municipality of Peyia to immediately demolish part of the pedestrian path constructed right above the sea caves which are...

19 patients at Famagusta General Hospital

Nineteen patients of COVID-19 are being treated at the Famagusta General Hospital, which operates as Reference Hospital. Out of these patients one is in the...

Pharmacies run out of flu shots

Association told CNA. As she said, people were in a state of panic to get the flu shot because of the COVID-19 situation and as...

Objections over only one woman on Deputy Ministry of Culture’s advisory group

Only one woman is part of the fledgling 16-member advisory committee on the establishment of a Deputy Ministry of Culture in Cyprus and this...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...