Filenews 7 February 2026 - by Eleftheria Paizanou
An effort to get 140,000 loan guarantors 'off the hook' and at the same time to strengthen the negotiating position of 70,000 primary debtors of non-performing loans who are in danger of having their homes put under the hammer, is being paid by DISY, through the bill prepared by its MP, Averoff Neophytou.
The proposal is co-signed by EDEK and DIPA as well as independent MPs. Mr. Neophytou wants to close the issue before the self-dissolution of Parliament in April and the completion of his parliamentary career.
Yesterday he also sent a relevant message to the chairwoman of the parliamentary Committee on Finance, Christiana Erotokritou, declaring that the timetables are not suffocating, calling on her to include the proposal on the agenda of the Committee.
So far, DISY has 25 positive votes on its side, while it is estimated that it will also be supported by members of the DIKO parliamentary group, who are often clearly against banking practices in loan management. It is possible that there will be support from the Ecologists as well. Therefore, with these data, the proposal seems to form the required majority while it is also a response to AKEL's proposal of 2023.
DISY formula
Mr. Neophytou with the law proposal reverses the 2018 law on foreclosures, which adheres to stricter schedules, which leads to a reduction in delays. Yesterday, DISY presented the formula that will be applied voluntarily by the creditors.
According to the proposal, in the event that the bank or credit acquiring company chooses either to sell any mortgaged property in the context of an auction process, or to proceed with recovery, then the amount of the guarantee for which the guarantors of the loan will be liable is limited and does not exceed the amount of the original loan, deducted, as the case may be, the amount to be collected from the auction, or the amount for which the property has been recovered by the bank or credit acquiring company.
At the same time, in the event that the creditors do not proceed with an auction or recovery of the mortgaged property, with the parallel discharge of the guarantors, then in the event that there is a dispute over the amount of the loan due by the borrower to the Court, they are obliged to wait for the Court's decision before proceeding with any action against the guarantors. The proposal also covers cases already pending before the Court, which concern a dispute over the amount due by borrowers.
This in practice means that if a borrower received a loan of €200,000, which with the arrears rose for example to €1 million, in case the property is sold at the original price of the loan, then the guarantors will not be liable for the remaining amount. Essentially, although they are not obliged, the lenders will voluntarily write off the obligations of the guarantors beyond the initial amount of the loan and discharge them. If the creditors do not proceed with the sale or recovery of the property, then if there is a dispute over the amount of the debt in court, then they will have to wait for a relevant decision to be issued.
Averoff: No danger
According to Mr. Neophytou, in addition to restoring balance in the relations between lender and borrower and guarantors, the proposal will allow tens of thousands of loan guarantors to breathe and be able to move on with their lives.
"If someone years ago became a guarantor of a loan for an amount of X, he cannot be liable today for four or five times the amount, because the bank then did not take timely measures against the borrower and allowed the amount to swell," he added.
As he said, the financial sector is not at risk, as it does not face capitalization issues and has great profitability, adding that the majority of NPLs are in credit acquiring companies, which when they bought the loans had priced the guarantees at zero.
Annita's intervention
For her part, the president of DISY, Annita Dimitriou, said that DISY does not support the banks but the proper functioning of the economy. The president of DISY called on banks to reduce the gap between lending and deposit rates, calling on the state to look into all cases of homes that are led to foreclosure, taking into account socio-economic criteria and to protect those who have repaid at least 50% of the initial loan amount.
