House Plenum approves government foreclosures package

The legislative framework surrounding foreclosures has entered a new phase.

Passed by the House Plenum, the new framework aims to provide a safety net to the truly vulnerable borrowers while at the same time ensuring that the effort to support those who really need it will not be exploited by strategic defaulters and will not endanger the economy and the stability of the country's financial system.

This House Plenum passed two government bills and the two complementary proposals of law that were submitted, discussed and put to vote before the House on 8 December.

More specifically, a law was passed which aims to have the Supreme Court appoint a number of judges for the purpose of hearing cases of loans for a main residence of up to €350,000.

A law was also passed regarding the powers of the Single Body for the out of Court Settlement of Financial Disputes and aims, among other things, to expand the scope of the existing competence of the Financial Commissioner for the appointment of a mediator for the purposes of credit facility restructuring.

The Commissioner will mediate for credit facilities secured by a main residence or business premises or terminated credit facilities concerning properties with a maximum value of €350,000 in the case of a main residence and €750,000 in the case of a business premises.

Furthermore, the two proposals of law were approved by the coalition parties DIKO, EDEK and DIPA, which regulate the debtor's right to submit a complaint against licensed institutions to the Financial Commissioner for main residence.

They provide that if the borrower is vindicated by the Financial Commissioner, the sale process of his property is suspended until he is vindicated by the court.

Dangerous amendments were rejected

The package of legislation was passed by the majority of MPs, with a series of amendments tabled that essentially altered their philosophy and content, ultimately being rejected.

In particular, all the amendments to the government bills put forward by AKEL, EDEK and the The Movement of Ecologists – Citizens' Cooperation were rejected.

Earlier, at the start of the Plenary session, AKEL raised the issue of filing in the form of an urgent matter, last summer's proposed law to grant the right of appeal to the Court to borrowers to secure an order suspending a planned sale, in order to examine potential abusive clauses and overcharges.

At the same time, AKEL raised the issue of postponing the debate and voting on all the legislation for the coming week.

Both the request for discussion of AKEL's law proposal as an urgent matter and the request to postpone the discussion were rejected with 32 votes against and 19 in favor.

It is worth noting that in the context of the Plenary session, six laws were unanimously approved that expand the definition of the term "restructuring" to include the disposal and transfer of real estate to the Cyprus Asset Management Company Ltd (KEDIPES) as part of the implementation of the Rent to Buy plan.

(Source: InBusinessNews)