26.01.2024
The House of Representatives unanimously passed legislation on Thursday that would see property auctions stopped if a mortgage debtor applies for the Mortgage to Rent scheme. According to the amendment, which was also adopted, the suspension of these auctions now includes debtors who applied for a “Rental Mortgage” but were refused. If a person appeals his refusal, and while the appeal process continues in court, he is also protected from having his property sold at auction.
Akel MPs aims to amend the main law on debt collection, giving debtors additional legal protection so that they can refuse to sell the mortgaged property.
Speaking in the House of Representatives, Akel MP Andreas Pashiourtidis said this provides additional protection for people at risk of losing their homes. According to him, even though the banks have given verbal assurances not to foreclose on the property, anecdotal evidence suggests otherwise .
Under the mortgage-to-rent scheme, designed to help homeowners at risk of losing their property due to mortgage debt, a person voluntarily transfers ownership of their home to their lender for five years. A legal entity – in this case the state-owned asset management company Kedipes – buys the house from the lender and becomes the landlord. During this time, the borrower no longer owns their home but will continue to live in it as a tenant.
In addition, the scheme provides that applicants who meet the basic criteria – provided they have a certificate of title – will transfer ownership to Kedipes , which will at the same time sign a 14-year lease agreement with the relevant person.
Moreover, under this plan, the state will cover the rent for 14 years with the option to buy the property by the previous owner after five years. This gives the tenant, that is, the previous owner or first-degree relative, the right to buy the property.
The same right applies to borrowers with a main residence worth up to €350,000 that was previously considered ineligible for inclusion in other housing schemes such as Oikia , as well as persons whose participation in such housing schemes has expired or ceased.
