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

Trump says protesters would have met ‘vicious dogs’ if White House fence breached

U.S. President Donald Trump on Saturday said demonstrators protesting the death of a black man who died after a white police officer knelt on...

Paphos: Police publish photos of stolen valuables

  Police have found jewellery, watches and other valuables in the possession of a 22 year old and a 15 year old who are under...

Protests flare around the United States over Minneapolis killing

Violent protests flared overnight in several U.S. cities as demonstrators vented their anger over the killing of George Floyd, a black man who died...

Just one new Covid-19 case on Saturday; total at 943

  One person has tested positive for coronavirus from a total of 2061 tests, the Health Ministry said on Saturday, bringing the total since the...

Paphos: 10 hotels to reopen in June

  Ten of the 57 hotels in the Paphos district are expected to reopen in June, the president of the Paphos branch of the Cyprus...

Taste

Local cuisine: An introduction

Rich in fresh ingredients and tasty herbs, offers the very best of Mediterranean culinary delights. Head out to a tavern and feast on a...

Spiced lamb with beetroot salad and scented yoghurt

Lay the lamb on a tray, skin side down. Rub with crushed garlic, sprinkle with spices and ground pistachios, wrap in plastic wrap and...

Easy seafood pasta with white wine sauce

Ingredients: 2-3 tbsp olive oil 1 garlic clove, chopped 2-3 tablespoons of whipped cream 1/3 cup white wine 300g spaghetti, roughly broken 300-400g of...

Traditional salads that will blow your mind away

This traditional salads will make you actually love salads! Cyprus may be famous for souvla and kleftiko but if you try the traditional salads with...