Banks in Cyprus are Concerned about Changes in the Mortgaged Law

Банки Кипра обеспокоены изменениями в законе о залоговой недвижимости
13 March 2021 Liza Medvetskaya
2766

Cypriot banks are concerned about the decreasing of the country's economy and the possible destabilization of the financial system in the event of a change in the legal framework of mortgaged real estate sales.

As it turned out the Parliamentary Committee will debate 13 real estate debt cases next Tuesday.

Parliamentary opposition proposed to amend the bills on the mortgaged property sale and purchase and postpone the sale of these objects for an indefinite period. The banks are concerned about the impact that the change in the provisions of the law could have on themselves and on the Cyprus economy as a whole.

According to the banks, if the bills are approved, then the terms of sales will be shifted, specific objects will be excluded from the established schedule for the sale of mortgaged housing, changes in the market value of property will have a serious negative impact on credit institutions.

The banks said that legislative changes in the structure of sales through amendments would make the process of selling such housing ineffective, complicate debt collection and provide support to strategic defaulters who take advantage of court delays.

In addition, it will create a culture of non-repayment of loans and increase the risk of spreading this culture to regular creditors who pay off their debts on time.

Банки Кипра обеспокоены изменениями в законе о купли-продажи залоговой недвижимости

Representatives of local banks reminded that in January 2021, the law was changed, according to the changes, in cases where there are compelling reasons to suspend the sale process, debtors have the opportunity to obtain an appropriate restraining order and appeal to the financial dispute resolution service. Within 30 days after the dispute is submitted to arbitration, the arbitrator issues a decision on the financial dispute. After the decision is made by the arbitrator, the debtor and the creditor continue to retain their rights provided for by law.

Cyprus financial institutions have expressed their concerns to the MPs, indicating that if the new amendments are approved, Cypriot banks will be in a worse position than other European banks.

In fact, the bankers stressed that Frankfurt is following the development of the Cypriot sector and that European supervisors are changing their supervisory requirements for capital adequacy.

Taking into account the possibility of approval of the draft laws, the banks assessed the impact that they will have on the country's financial system. They believe that the risk profile of the Cypriot banking system will increase, and therefore, uncertainty will arise for Cypriot banks due to the instability of the Cypriot legal framework, and the creditworthiness of the Cypriot economy and credit institutions will be reduced.

In addition, they believe that the collateral value for both performing and nonperforming loans, will be reduced due to delays and prolongations in the completion of liquidation procedures. Finally, according to their estimates, there will be a need to provide additional collateral for new loans and, possibly, increase the cost of lending to households and enterprises, while reducing the value of loan portfolios in the event of the sale of loans to credit companies.

Source: philenews.com
Photos: pixabay.com
No one has left a comment yet
Place qoute
New objects

Apartment for sale

€ 260 000

Apartment for sale

€ 270 000

Apartment for sale

€ 270 000

Apartment for sale

€ 277 000

Apartment for sale

€ 297 000

Apartment for sale

€ 127 000

House for sale

€ 350 000

Apartment for sale

€ 3 100 000

House for rent

€ 5 000

House for rent

€ 6 500
Компания «Dom Real Estate» Контакты:
Адрес: Limassol, Cyprus,
Телефон:+357 25 212 212, Электронная почта: info@dom.com.cy