CYPRUS: Government will only support distressed borrowers through ESTIA

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Cyprus has warned it will not support borrowers who can pay off their loans by including them in the state-funded ESTIA scheme set up to bailout homeowners with toxic mortgages.

Finance Minister Harris Georgiades told the House Finance Committee that the European Commission has not given the go ahead to give handouts to borrowers who are consistent in their repayments.

"We must bear in mind that this is taxpayers' money. Any available resources should be used to help out people who are not able to service their loans," said Georgiades.

Reliable borrowers, he said, were rewarded with a 50% interest rate drop, calling on all those who need help to submit their application in order to make clear how many people are actually eligible for the scheme.

Georgiades said the government does intend to add further adjustments to include two categories of distressed borrowers who are currently not included in the scheme.

These include borrowers of the Home Financing Corporation who do not have title deeds because they built a house on state land.

The minister made it clear that the bank's divestment measures for borrowers with applications for inclusion in the ESTIA scheme have been suspended.

The same assurance was given by Michael Kronides, director of the Cyprus banks' association.

Asked by MPs, Kronides said that only 53 applications had been submitted to the three largest banks since September 2, when the application period opened.