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CYPRUS: Troika to give final nod on foreclosure bill amendments

03 September, 2014

The Troika of international lenders is expected to give its final nod of approval or rejection of amendments to the controversial foreclosures bill, that has to be passed by parliament prior to Friday’s Eurozone finance ministers’ meeting.

 


President Nicos Anastasiades said Tuesday that the government was continuing its deliberations with the parliamentary parties ahead of Wednesday’s meetings of the House Finance Committee and Internal Affairs Committee, in a bid to achieve a consensus.
Ratification of the crucial bill on foreclosures of mortgage property will release the next tranche of 453 mln euros of bailout money, or else the government could run out of cash by the end of November.
The bill, set by the Troika of the IMF, the European Commission and the European Central Bank as part of the wider 10 bln euro bailout programme, aims to regulate the mortgage market and allow lenders, such as banks, to foreclose on faulty borrowers or those who can afford to but refuse to repay their loans.
As a result, the non-performing loans (NPLs) represent about 45-50% of the loans portfolios, a very high rate the Troika wants to lower.
But opposition parties have been demanding renegotiation of the bill, saying that ordinary households could lose the roof over their heads.
The government has added safeguards that would make foreclosures an arduous legal task and promised to introduce a parallel bill on corporate and individual insolvencies that would help exclude foreclosure of mortgages on first homes, if the borrower is bankrupt.
An alternative has been considered to hand over all risky and low-income household mortgages to the state-owned Housing Finance Corporation that would, in turn, lease back the home to the original owner until the mortgage is repaid, as is the case of a similar package in Greece.
The government, President Anastasiades said, continues its contacts with the political parties and he expressed hope that a solution will be found, in order to avoid any “adventures”.
Asked whether the government has a ‘plan B’ in the event that the bill is not ratified by parliament, the President expressed hope that there would be no need for the government to come up with a new plan, but added that there are always alternative plans in case of a deadlock.