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CYPRUS: Parties to continue discussions on foreclosures as disagreements remain

03 September, 2014

Parliamentary parties will continue discussions on a government bill on foreclosures Thursday as disagreements between the parties and Cyprus` international lenders remain.

During a closed meeting of the parliamentary committees of Financial and Internal Affairs in the presence of the Minister of the Interior and the Attorney-General, Finance Minister Harris Georgiades gave the Troika`s response on the proposed amendments.

Sourced told CNA, that the Troika agreed that a borrower whose property enters a foreclosure process should have the right to legal assistance, a borrower in case of a foreclosure should have the right to opt for the evaluation of his property by the Department of Land Registry instead of a private evaluator and they also gave a green light to the exemption of a borrower who does not have a title issued. Additionally, the Troika agreed with the amendment that would exclude bank shareholders from auctions of foreclosed property, as well as with the demand that the Central Bank should submit to the parliament reports on the progress of loan restructuring on a quarterly basis. The lenders were not negative to the proposal that funds that would buy securitized loans should be subjected to the same regulations as commercial banks, that is, providing restructuring options to troubled borrowers before resorting to the process of foreclosure.

However, the Troika rejected the proposal that the foreclosure bill should be put into force concurrently with the insolvency framework to be implemented on January 2015 and they also gave a negative response to an amendment that would protect small business property and primary residences, noting that this would be achieved through the insolvency framework. They also rejected the proposal that the remaining sum of loan for which a property is being auctioned should be written off, noting that this issue will be discussed in the context of the insolvency framework.

In statements following the meeting, Nicolas Papadopoulos, President of the Financial Affairs Committee welcomed the fact that some of the proposals submitted by the parties have been accepted by the government, noting however that some disagreements remain.

“We hope that tomorrow we will have more convergences,” he added.

Papadopoulos declined to give any details of the issues accepted by the Troika, noting that “details are important as the discussions continue.”.

The bill should be approved by the House Plenary on Friday, as the approval of the foreclosures bill is a precondition for the disbursal of the next tranche of the €10 billion bailout. The Euro area finance Ministers that would decide on the next disbursement will meet on September 12.