COVID19: Cyprus banks extend freeze on foreclosures

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The Cyprus Banks Association announced Thursday they would extend the freeze on foreclosures of primary homes introduced during the first COVID-19 lockdown.

The freeze involves properties which are registered as the owner’s primary home, valued at up to €350,000 and it will be valid until the end of March 2021.

Cyprus banks took the initiative before parliament could decide.

MPs were taking their time to decide on extending an earlier freeze introduced by law, which expired at the end of October.

According to a written statement by the association, the decision was made “taking into account the prevailing economic conditions.”

A ‘light lockdown’ introduced by the government on 11 December until 31 December to stop a new wave of coronavirus infections, has pushed many businesses into financial difficulty.

The latest national measures include shutting down shopping malls, restaurants, bars, cafés, cinemas, and theatres with shop-owners saying their businesses are destroyed, and employees seeing their income shrivel.

The bank association clarified that the freeze does not apply to mortgaged properties related to credit facilities, for which a sale agreement has been reached.

This decision comes into force on 21 December.

The banks had heard Finance Minister Constantinos Petrides last week pleading for targeted foreclosure to be suspended until the end of March next year.

Cyprus Banks said, “a suspension of foreclosures on primary residences tied to loans is not expected to affect the banks’ activities over the next few months”.

They will, however, as they noted, start foreclosure procedures when borrowers do not cooperate.