Cyprus seeks solution on foreclosures

Cyprus is heading toward suspending first-residence property foreclosures up to 350,000 euros by end-October.

This intermediate solution is seen as a compromise, allowing either the government, the Central Bank of Cyprus, or both to come up with proposals that will effectively address the issue of nonperforming loans.

On Tuesday President Nikos Christodoulides called on the parties involved in the foreclosure matter and who have the power to make decisions to find a solution and prevent what is likely to be voted in Parliament. Christodoulides wanted to prevent the events expected on Thursday, namely the four laws related to the framework of foreclosures and specifically the law that would allow the debtor to halt the foreclosure process after disputing the amounts owed.

Such a decision, according to banks and servicers, would cause significant and lasting complications, both for banks and the wider judicial system, which is already considered slow in its procedures, thus halting the foreclosure process for 4-5 years. The proposal to be adopted by the banks and servicers cannot be called a “suspension of foreclosures.”