Nicosia’s proposals for vulnerable citizens

Nicosia’s proposals for vulnerable citizens

Cypriot Finance Minister Makis Keravnos submitted several government actions aimed at addressing issues related to nonperforming loans to Parliament on Wednesday.

In a letter addressed to Speaker of the House Annita Demetriou, the Finance Ministry emphasized that the proposed framework is considered satisfactory and provides a “safety net” for vulnerable groups.

The letter informed Parliament about the approval of an amendment to the Courts (Special Jurisdiction) Law. The amendment aims to regulate the resolution of disputes between borrowers and creditors concerning credit facilities secured by main residences valued at up to 350,000 euros within the district courts.

The government stated its intention to strengthen and enhance two legislative proposals submitted by parliamentary parties. Specifically, in relation to the AKEL proposal concerning the pricing method in voluntary property-for-debt exchanges, a revised text incorporating recommendations from the Legal Service has been proposed to ensure constitutional compliance. Additionally, cases related to rent versus installment are excluded from the proposal.

Regarding the DISY-DIKO proposal to provide extensive information during the sale procedure, the government noted that it has been enriched with additional obligations. This includes the requirement for mortgage lenders to indicate the dates of sending letters according to the central bank’s Code to all borrowers, demonstrating compliance with the Code. Furthermore, in cases involving only loans with a mortgage on main residences valued at up to €250,000, the mortgage lender must accompany the Type I letter with an affidavit from a statutory auditor or agency confirming the debt amount, with the certification cost borne by the mortgagee.

Keravnos further informed that the Rent-versus-Installment plan, approved by the European Commission, will be officially adopted at the next Council of Ministers meeting. The plan provides a fair and definitive solution for vulnerable groups unable to service their mortgage loans for main residences worth up to €250,000 at market prices, allowing them to retain their homes.

The letter also mentioned that the government is exploring the possibility of relaunching the ESTIA scheme, but its implementation is subject to the approval of the European Commission. 

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