Gov’t happy as MPs pass foreclosure bills

2 mins read

President Nikos Christodoulides expressed satisfaction with the passage of a set of bills on foreclosures on Friday, underscoring a commitment to expedite proceedings addressing risks to the country’s economy from non-performing exposures.

“I am optimistic that the implementation of prudent policies will fortify our economy and bring further growth and progress for our country,” said President Christodoulides in a statement.

The president noted that, “the approval by the Plenary of the House of Representatives of the bills complementing the package of measures addressing NPLs and protecting vulnerable borrowers marks a significant milestone for our country’s fiscal stability and financial prospects”.

He argued that NPLs have been posing a risk to fiscal stability and the financial credibility of the country.

The non-performing loans ratio in Cyprus banks stood at 8.6 % in August, compared with 10.6% in September 2022 and significantly reduced from the 50%-plus at the financial crisis and crash of banks in 2012.

Christodoulides was pleased to note that, “after persistent efforts over several months, we have come to a successful resolution. With the comprehensive approach of the package promoted by the government, the legislative framework is now complete and will serve as an effective safety net for the protection of vulnerable and consistent borrowers”.

He further hailed the responsible political forces that significantly contributed to this achievement.

“Collective interest dictates cooperation and sobriety, and today’s development demonstrates the perspective and potential of our country when prudence and responsibility prevail,” noted the president.

“I am optimistic that the implementation of prudent policies will fortify our economy and bring further growth and progress for our country,” said Christodoulides.

On Friday, the government’s package of foreclosure bills successfully transitioned into law, underscoring a commitment to expedite foreclosure proceedings and confer enhanced authority upon the financial ombudsman.

Majority vote

Following extensive deliberations, lawmakers endorsed the legislation with a majority, rejecting proposed amendments from Akel, Edek, and the Green Party aimed at reinforcing protections against foreclosures on primary residences.

One of the recently enacted laws empowers the Supreme Court to appoint judges to streamline cases where property owners challenge foreclosure actions, encompassing primary residences valued up to €350,000 and small business premises. The law received 35 votes in favour, three against (from Edek), and 15 abstentions (from Akel).

Another law, securing 38 votes in favour, expands the financial ombudsman’s authority to appoint a mediator for loan restructuring, covering cases involving primary residences up to €350,000 and commercial properties up to €750,000, with three members of Edek opposing and 15 from Akel abstaining.

Two bills from DIKO, EDEK, and DIPA also received legislative approval, outlining debtors’ rights to file complaints against banks with the financial ombudsman. These complaints relate to primary residences, and if the ombudsman rules in favor of individuals, the foreclosure process is suspended until the case proceeds to court.

Concurrently, six additional laws were unanimously adopted, broadening the definition of “restructuring” to include the disposal and transfer of immovable property to the Cyprus Asset Management Company (KEDIPES) as part of the ‘mortgage to rent’ scheme.