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Cypriot government throws lifeline to desperate expat homeowners
| Published: | 30 Jan at 6 PM |
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Tens of thousands of expat homeowners in Cyprus who are facing the loss of their homes and financial ruin due to fraudulent developers are to be given hope by the government.
Cyprus is still struggling with managing its massive bailout, and its economy as yet is showing no signs of recovery. However, after years of ignoring the scandal which threatens to rob expats of their homes and financial security, the government has announced its plan for a rescue scheme.
The scandal involved Cypriot banks and a 50-year old law which allowed developers and the banks to retain properties on their books as assets without informing those who purchased the homes. As the recession began to bite and developers and banks feared failure, home owners were urged to take out mortgages on their properties, and were not informed that their developers had the first call.
As developers in debt to the banks went bankrupt due to the worsening economic crisis, thousands discovered that they had no right to their homes, even if they had paid in cash. The banks sent out repossession orders and, when last year’s crisis struck, were unable to sell their properties and return home.
As a result, some 6,000 properties are pending repossession and thousands more expats are in financial meltdown, unable to pay their mortgages and even unsure whether they should continue to do so. The Cypriot government is planning to buy all affected homes and let them for a nominal rent to their former owners, as well as changing the law to benefit home buyers.
The government also suggests a legal restructuring of the basically illegal home loans over a much longer period of time as an option, thus making regular repayments affordable. At present, many thousands of owners are not in possession of the deeds to their properties, with the Land Registry struggling to determine ownership and clear a huge backlog without relevant documentation.
Cyprus is still struggling with managing its massive bailout, and its economy as yet is showing no signs of recovery. However, after years of ignoring the scandal which threatens to rob expats of their homes and financial security, the government has announced its plan for a rescue scheme.
The scandal involved Cypriot banks and a 50-year old law which allowed developers and the banks to retain properties on their books as assets without informing those who purchased the homes. As the recession began to bite and developers and banks feared failure, home owners were urged to take out mortgages on their properties, and were not informed that their developers had the first call.
As developers in debt to the banks went bankrupt due to the worsening economic crisis, thousands discovered that they had no right to their homes, even if they had paid in cash. The banks sent out repossession orders and, when last year’s crisis struck, were unable to sell their properties and return home.
As a result, some 6,000 properties are pending repossession and thousands more expats are in financial meltdown, unable to pay their mortgages and even unsure whether they should continue to do so. The Cypriot government is planning to buy all affected homes and let them for a nominal rent to their former owners, as well as changing the law to benefit home buyers.
The government also suggests a legal restructuring of the basically illegal home loans over a much longer period of time as an option, thus making regular repayments affordable. At present, many thousands of owners are not in possession of the deeds to their properties, with the Land Registry struggling to determine ownership and clear a huge backlog without relevant documentation.
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