15.07.2022
The Cypriot Parliament on Thursday passed a bill to purposefully suspend property foreclosure until the end of October, and Finance Minister Konstantinos Petrides expressed frustration, arguing that failure to offer an effective foreclosure structure would “punish” successive borrowers.
The Plenum of the House of Representatives passed by 34 votes in favor and 16 against bill to amend the Real Estate Transfer and Mortgage Law to extend the targeted suspension of foreclosure on mortgaged property until October 31, 2022 due to the economic and social impact of the Covid-19 pandemic and the war in Ukraine.
The suspension applies to the main residence, the estimated value of which does not exceed 350,000 euros, as well as to the commercial premises of companies whose annual turnover does not exceed 750,000 euros. This also applies to agricultural plots, the estimated value of which does not exceed 100,000 euros.
The proposal for the bill was jointly presented by MPs from the opposition parties AKEL, EDEK, the Greens, ELAM and DEPA.
Petrides, in a written statement, expressed his disappointment with the “voices of populism”, which, he said, “once again threaten the credibility and economy of the country, at a time when any downturn in the Cypriot economy could turn into a catastrophe” . be catastrophic.”
Any extension of the foreclosure process, whether statutory or voluntary, “protects primarily strategic defaulters at the expense of savers and regular borrowers,” he said.
The Minister pointed out that the suspension of foreclosure “during this critical period” for the economy also risks the introduction of the long-awaited 400 million euro Mortgage for Rent scheme, which protects the main homes of vulnerable households, including non-public ones. viable borrowers who have applied for the ESTIA debt relief scheme, as its approval by the EU will also depend on the effectiveness of the enforcement system. “Without an effective enforcement tool, there is a clear risk that the scheme will not be approved by the EU, and in any case, borrowers may again refuse to participate in the scheme,” he adds.
Petrides also said that the inefficient foreclosure system “acts like a punishment” for regular borrowers, is risky for savers, and deprives valuable liquidity for investment and growth.
The minister thanked the deputies who voted against this bill.
