The Cyprus Central Bank is Ready to Extend the Suspension of the Mortgaged Property Sale

Центробанк Кипра готов продлить мораторий на продажу залоговой недвижимости
17 March 2021 Liza Medvetskaya
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The Central Bank of Cyprus is considering the possibility of extending the suspension of sales of mortgaged real estate until July 31, 2021.

Now the property cannot be sold if:

  • property that is used as the main place of residence and the value of which does not exceed EUR 350 thousand;
  • commercial real estate worth less than EUR 150 thousand;
  • agricultural land worth up to EUR 150 thousand.

At a meeting of the Parliamentary Committee (which took place on Tuesday, March 16) the head of the Central Bank said that the financial institution is ready to suspend sales of collateralized real estate until the end of July in order to avoid the complete suspension of auctions, which the parliament so aspires to. According to the Central Bank, this is unacceptable, since it can lead to the destabilization of the country's financial system and will have a negative impact on the economy of Cyprus as a whole.

It is worth noting that during the meeting it was also decided to create a Special Committee, which will consider 13 bills on the asset sales, submitted earlier by the deputies. In addition, its task will include calculating the exact number of non-performing loans in the country.

Центробанк Кипра готов продлить мораторий на продажу залоговой недвижимости

Among other things, it became known that the Parliamentary Committee is now considering an option that is expected to allow vulnerable households with toxic loans to continue to live in their homes, paying rent instead of paying loans.

According to the idea, the real estate of unreliable creditors with a discount of up to 50% will be bought by the Bad Bank. Subsequently, it will not evict them from their homes, but will provide an opportunity to rent the former property with the right of further repurchase.

As you may know the Ministry of Finance is promoting a new plan for vulnerable families (they want to transform KEDIPES into a bad bank), which has nothing to do with Estia-2.

In fact, it will be a kind of leasing, in which borrowers will be able to buy their property back within 25 years. As KEDIPES develops, it will purchase new bad loans on basic residential and commercial housing.

Source: philenews.com, economytoday
Photos: pixabay.com
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