Filenews 17 February 2026 - by Eleftheria Paizanou
The parties are taking battle positions in Parliament to change the legal framework for foreclosures before the parliamentary elections in May, in order to stem the upward trend in the value of non-performing loans. Confidential data from the Central Bank (CB) that were forwarded show that Cyprus does not want to get rid of the hoarseness of non-performing loans.
The value of these, not only did not decrease, but increased to more than €20 billion (credit acquiring companies and banks). In fact, their value is increased compared to the period of the economic crisis, as at that time it was around €15 billion.
More specifically, according to CB data, after the sales of loans to credit acquiring companies, they hold loans worth €19.7 billion in their portfolios, of which €18.5 billion are not served. In fact, 87% of loans to companies are terminated.
It is worth noting that these companies, according to the CB, bought 141,478 loans at a price of €3.2 billion, i.e. 80% lower than their value. Until last June, credit acquiring companies had collected an amount of €5.7 billion through repayments, the recovery of real estate after a barren auction and the exchange of real estate for debt. That is, the companies received €3.6 billion through cash repayment, another €619 million received them from the recovery of the property after a barren auction as well as €1.5 billion from the exchange of real estate for debt.
Therefore, as the data show, companies have more than covered the amount they spent on the purchase of loans, while due to the interest that continued to be imposed on NPLs, they jumped to €18.5 billion. However, the interest and compound interest of loans is something that worries the government.
KEDIPES data for banks as well
On the other hand, KEDIPES had taken 77,561 loans from the Cooperative worth €7.5 billion, of which their balance in June 2025 was €5.7 billion of which €5 billion were non-performing. The amounts were reduced through the exchange and recovery of real estate and their repayment. In the banking system last June, there were a total of 24,736 non-performing loans amounting to €1.45 billion. In fact, as of December 2024, these decreased by €86 million due to their repayment, their transfer to performing loans, contractual and accounting write-offs through the acquisition of real estate. The fact that banks got rid of a large part of the red loans makes them less vulnerable compared to the 2013 period.
The parties and the government's intentions
Now, according to the parties, it is easier to proceed with regulations regarding foreclosures, as they will not affect the financial stability of the banks. Yesterday, the members of the Parliamentary Committee on Finance decided to discuss on March 9 the general issue of foreclosures. Around 20 to 30 law proposals submitted over time by all parties are pending before the Committee. At the same time, other law proposals are expected to be submitted in the coming days, which will be examined by the government side. According to information, it does not seem to be in the intentions of the Ministry of Finance to proceed with legislative changes, however, it is considering the possibility of reinstating the Rent Against Instalment Scheme targeted at specific categories of borrowers. Before making its final decisions, it will consider the fiscal cost to the state. The government believes that borrowers have the necessary tools in their hands to protect their primary residence, either through the Financial Out-of-Court Dispute Resolution Body or through justice. It is worth noting that with the change of the legal framework in 2023 with the strengthening of the Commissioner's responsibilities, they did not use the new measures to a satisfactory extent.
The proposals of AKEL and Ecologists
However, there may be many law proposals in Parliament, the "game" will be played in specific regulations. In particular, there will be an intense debate on the proposed law of AKEL and the Ecologists, the right of borrowers to appeal to court and suspend the sale of the residence in which they live will be restored, in cases of illegal charges and abusive clauses on the part of the banks
AKEL MP Aristos Damianou complained that today there is a "pogrom" of foreclosures, with thousands of people being displaced. He pointed out that there is no barrier to the properties being sold, as a result of which citizens lose their primary residence and their small businesses. The president of the Ecologists, Stavros Papadouris, said that the Parliament has one last chance to provide a solution to the issue of foreclosures, stating that there is a legislative gap in the context of foreclosures.
DISY: Moving towards the guarantors
The proposal for a law by DISY, DIPA, EDEK and independent MPs for the shielding of guarantors, which forms a majority, will be put on the table. 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 to be issued before proceeding with any measures against the guarantors.
DIPA: Puts foreclosures in the refrigerator
On Thursday, DIPA will also submit new proposals to the Parliament, which were presented by the president of the party, Marios Karoyan. As he said, DIPA is making corrections with the aim of protecting the main residence and ensuring social cohesion. Specifically, DIPA will submit a proposal to suspend the sales of main residences worth up to €350 thousand. until the end of the year, to give the state time to close the gaps in the legal framework. Another law proposal is to strengthen the institution of the Financial Commissioner, providing him/her with the ability to make decisions, which are binding and final, in the event that the difference between the borrower and the creditor does not exceed €50,000. The implementation of the Central Bank's Code of Conduct is made mandatory. At the same time, banks should be obliged in cases of refinancing of primary residences up to the first degree of kinship, to fully apply the instructions of the Central Bank, and in particular the criteria concerning the real incomes of primary debtors.
Mr. Karoyan called on the government to reinstate the Rent Against Instalment Scheme with the aim of becoming more human-centred, so that vulnerable groups of the population are not excluded in particular and to remain open until the end of 2026. It also calls for the creation of a Special Solidarity Fund to which the revenues from the imposition of a special tax of up to 15% – depending on the case – will end up in each mortgage creditor — bank or investment fund — for each property auctioned or recovered. Finally, it calls for the promotion of two other proposals pending in Parliament for the non-imposition of additional interest by banks in cases where the debt of the loan, including interest, is double the original debt. They also propose to write off the balance of the debt in cases where, after the sale of a mortgaged property, the proceeds received from the sale or auction do not cover the amount of the mortgage debt, plus interest, the balance of the debt should be written off.
