Filenews 13 May 2024
Households in Cyprus have NPLs in excess of €11 billion. However, the much-discussed new foreclosure framework did not move them.
The new Financial Commissioner, Valentina Georgiadou, stated that during the five months that the new foreclosure framework and the expanded capabilities of her office were implemented, interest from borrowers was minimal.
Specifically, as he revealed to "F", the office received less than ten approaches, none of which were successful as the conditions were not met.
The lack of interest from borrowers with Non-Performing Loans (NPLs) to take advantage of the new possibilities of the framework is a cause for concern as the issue continues to be acute. According to data recently provided to "F" by the Central Bank, loan servicing companies still have NPLs amounting to €21 billion (another €2 billion to banks) relating to 75,000 loan agreements. Of these, €10.8 billion belong to households and probably the vast majority of them are mortgages on real estate
Against this background, the scant interest recorded in measures that have been discussed and occupied for more than a year by both the executive and the legislature obviously causes concern. This is not the first time that plans aimed at protecting and supporting vulnerable borrowers have not met with a response. Previous projects such as "Estia" and "Oikia" received a similar reception. In fact, in the case of the new foreclosure framework, foreclosure procedures were frozen for many months until an agreement was reached in Parliament and there was optimism that those affected would take advantage of it, especially since an issue that could be regulated was the amount of the balance.
Although the Financial Commissioner expressed optimism that applications will increase in the coming period, however, no one expects them to be proportional to the huge number of loan agreements with primary residence mortgages, which for years have been classified as NPLs.
