Filenews 25 October 2023 - by Eleftheria Paizanou
Political pressure is being exerted on banks and credit acquiring companies to extend for a few weeks the suspension of foreclosures of primary residences worth up to €350,000.
This is because, firstly, the suspension applied by their own decision by banks and companies expires at the end of the month and, secondly, the bill that will establish an alternative out-of-court mechanism for the management of bad loans and foreclosures, through the expansion of the responsibilities of the Financial Commissioner, has not yet been approved by the Council of Ministers.
According to "F" information, the bill was prepared and has been given to the co-governing parties and other bodies for their positions. The bill was a demand of DIKO, EDEK and DEA to prevent the adoption last summer of a bill that would have suspended foreclosures through the issuance of a court order.
A competent source told "F" that creditors and loan servicers have already been approached to extend the suspension of the law on primary residences worth up to €350,000, so as to allow room for the bill to be approved by the Council of Ministers and Parliament.
The Ministry of Finance does not want the freezing of foreclosures to be done through a proposal for a law by the parties, as some of them will seek to include in the suspension of the law other types of real estate, namely business premises and parcels of land.
A few days ago, the Minister of Finance had stated that the bill will be submitted to Parliament before the expiration of the foreclosure moratorium, but this is not possible, as tomorrow there will be no plenary session of the Parliament (due to the absence of MPs abroad) and there will be no official submissions of bills.
According
to the draft bill prepared by the Ministry of Finance, in addition to the expansion of the responsibilities of the Financial Commissioner, which was the request, provisions are also changed in relation to the operation and structure of the Body for the Extrajudicial Settlement of Financial Disputes. It will cover main residences and business premises, with a total contractual obligation worth up to €350,000.
Under the bill, the Financial Ombudsman will be able to deal with a complaint against a financial undertaking (bank/credit company) that has initiated legal proceedings in relation to a matter relating to and/or related to the complaint, if the Commissioner reasonably considers that the financial undertaking has initiated such proceedings in order to prevent the lodging of the complaint or to frustrate or delay its investigation. In addition, the Financial Ombudsman will be able to deal with a complaint against a financial undertaking, in accordance with the Certain Matters of Mediation in Civil Disputes Law.
The Commissioner will use experts where he is substantiated to obtain an opinion on specific specific complaints or complaints, such as a medical opinion, actuarial study and property valuation study. At the same time, the scope of the law is expanded and will also apply to terminated loans, in relation to which court proceedings are ongoing at the time of application.
The Commissioner will not be able to deal with a complaint in respect of which a court decision had already been issued on the day on which it was lodged or judicial proceedings are under way to examine the same complaint. The Commissioner will be able to examine a complaint which is referred to mediation or which on the date of its submission is being or has previously been examined by another alternative dispute resolution body or by a Court.
Who stays out of the council?
The draft bill changes the structure of the board of directors of the Single Body for the Extrajudicial Settlement of Financial Disputes. Representatives of the Ministries of Finance and Energy respectively are appointed to the positions of President and Vice-President. Today, persons proposed by the Minister of Finance are appointed to these positions.
The draft envisages that the remaining five members will be representatives of the Ministry of Energy, the Ministry of Finance, the Central Bank, the Securities and Exchange Commission and the Insurance Companies Control Service. Essentially, the Association of Banks, representatives of investment firms, as well as consumers are left out of the board. Finally, the powers and responsibilities of the Assistant Commissioner are strengthened, in relation to loan restructuring procedures, etc.
