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Expat homeowners in Cyprus fear repossessions after new law stalls
| Published: | 14 Apr at 6 PM |
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Tagged: Property Abroad, Cyprus
A new law protecting expat homeowners in Cyprus from banks attempting to claw back bad debts through repossession has stalled in the island’s parliament.
Expats on the island, many of whom are retirees, had expected the law to be passed within a few weeks, but are now terrified the delay will allow banks to go ahead with repossession orders. The scandal came about when developers borrowed finance against property, then sold on the homes to expats via mortgages before defaulting on the loans.
Resulting confusion over the ownership of the properties has left expat owners open to the risk of losing their homes to bank attempts to claw back the original unpaid loans. Due to recession and huge falls in property prices, the majority of developers are no longer in business and unable to be sued by the banks.
According to a representative of the Cypriot parliament, opposition MPs argued that the bill should give less protection to homeowners, thus causing it to stall. The government is expressing fears that its breakdown may lead to banks no longer offering mortgages and taking advantage of the delay by beginning repossession proceedings.
However, a government spokesperson told local media that the delay is resulting in needless panic amongst expat homeowners, as an assurance exists that banks will not repossess or sell primary homes. According to finance minister Haris Georgiades, the government is dedicated to protecting those with low incomes, but the opposition is calling for changes to the proposal aimed at allowing those who can afford to pay mortgage charges to hold off with no risk of legal action.
Expats on the island, many of whom are retirees, had expected the law to be passed within a few weeks, but are now terrified the delay will allow banks to go ahead with repossession orders. The scandal came about when developers borrowed finance against property, then sold on the homes to expats via mortgages before defaulting on the loans.
Resulting confusion over the ownership of the properties has left expat owners open to the risk of losing their homes to bank attempts to claw back the original unpaid loans. Due to recession and huge falls in property prices, the majority of developers are no longer in business and unable to be sued by the banks.
According to a representative of the Cypriot parliament, opposition MPs argued that the bill should give less protection to homeowners, thus causing it to stall. The government is expressing fears that its breakdown may lead to banks no longer offering mortgages and taking advantage of the delay by beginning repossession proceedings.
However, a government spokesperson told local media that the delay is resulting in needless panic amongst expat homeowners, as an assurance exists that banks will not repossess or sell primary homes. According to finance minister Haris Georgiades, the government is dedicated to protecting those with low incomes, but the opposition is calling for changes to the proposal aimed at allowing those who can afford to pay mortgage charges to hold off with no risk of legal action.
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