The parties attempted yesterday during the last session of the Plenary Session of the Parliament to make the legislative regulations on foreclosures and the insolvency framework, which were referred back by the President of the Republic Nikos Christodoulides, as legally and constitutionally correct as possible.
Four referrals were accepted and one was rejected. Specifically, two of them were accepted after some provisions were previously differentiated, while two more referrals were partially accepted, as the required amendments were made.
Yesterday, within 45 minutes, in the context of the session of the parliamentary Committee on Finance, it was possible to find consensual solutions for the majority of the legislation. For at least three pieces of legislation, the changes were based on the suggestions included in the referrals, so that the laws could be signed by President Christodoulidis.
Following yesterday's decision by Parliament and if the Presidency gives the green light, the following will apply:
∙ In relation to the proposal for a law of the Ecologists, which amends the Law on the Insolvency of Natural Persons (Personal Repayment Plans and Debt Discharge Decree), the value of the main residence increases to €400,000 from €350,000 which was before the enactment of the law. Also, distortions that create artificial obstacles for insolvent persons, who could fall under the insolvency framework, are removed.
∙ The second regulation concerns the proposal of ELAM, which prohibits creditors from demanding additional collateral from borrowers, when the amount of the loan is overcovered by the mortgage. The Parliament revised the proposal and the reference to a credit acquiring company was replaced with a reference to a credit purchaser or a buyer of credit facilities, in the sense attributed to the terms in the law on Credit Managers and Credit Purchasers and for related issues.
The above referrals were unanimously accepted by the Legislative Body. It is estimated that the President of the Republic will sign the two legislations.
Reference risk to the Supreme
At the same time, two more referrals were partially accepted, after specific provisions were amended and new provisions were included. The changes that are being made are as follows:
∙ With the proposal for a law on the Liberalization of the Interest Rate, which was submitted by AKEL, DIKO and DIPA, banks are prohibited from imposing additional interest in the event that the amount of credit facility due, including interest, amounts to twice the original debt. The President of the Republic had indicated in the referral that the regulation introduces indirect retroactivity, in a way that violates the right to contract freely, since retroactively affects already acquired rights of the contracting parties, which were agreed in the contract. During the discussion yesterday in the Parliamentary Committee on Finance, Valentina Georgiadou noted that the proposal can have retroactive effect, as in the past the regulation of loan agreements had been differentiated by law. On the other hand, the spokeswoman of the Ministry of Finance said that the regulation cannot be applied retroactively, but can apply to new loan agreements.
It is worth noting that for this legislative regulation there are estimates that the President of the Republic will not sign it and will proceed with a petition to the Supreme Court.
New tool in the hands of borrowers
The proposal of DIKO, which was previously amended and is likely to be signed by President Christodoulidis, was partially accepted. In particular, borrowers will have another tool in their hands to protect themselves effectively. A new and independent procedure will operate, in parallel with the one applied to the foreclosure law, so that those affected have another additional option.
The DIKO bill provides the possibility for district judges, who have the competence to hear cases of a financial nature and in particular disputes between the borrower/guarantor/security provider and the creditor, whether this dispute concerns a credit facility, debit balance, unfair terms or any other issue or dispute arising from the contract concluded between the parties, to issue a decree setting aside a Type "IA" sale notice.
The mortgage debtor can request that the notice of sale of a mortgaged residence (Type "IA") be set aside. After 12 months, the mortgagee is entitled to proceed with a new notice, unless the Court decides otherwise, setting aside the notice again, if there are special reasons and provided that the borrower does not show bad faith.
