The Cyprus Parliamentary Finance Committee is scheduled to review a number of bills aimed at reducing the islands non-performing loans and have been approved by the Council of Ministers to give lenders effective tools to start collection and proper defense mechanisms, reducing the need to increase provisions or raise further capital.
So, what will the bill actually accomplish? According to the Cyprus Council of Ministers, the proposed changes to the law will affect the following areas:
- The clarification of the existing law and exempts the buyer from transfer fees resulting from the transfer of collateral in the form of immovable property.
- The use of electronic auctions of foreclosed properties for mortgages and taking out loans.
- Providing the lender access to a mortgaged property for the purpose valuations.
- Dramatically reducing delays due to the abolition of provisions.
- Changes in the way lender correspondence is sent and received by borrowers.
- Provides to ensure that no loans remain unsecured when the security becomes property of the buyer of a loan.
- Abolishes the law that allows borrowers whose property is worth less than €350,000 to be subsidised with government funds.
- The regulation of transfer of rights & obligations, priorities, the continuation of lawsuits and the storage of documents.
- Giving loan purchasing companies access to the data exchange system so that they can better evaluate borrower’s creditworthiness.
Other provisions change the process for the sale of a property and restrict the time in which a lender can acquire a property.
The proposed changes in Cyprus company law aim at encouraging both borrowers and lenders on the island to restructure debt. The changes offer for an increase in the commission received by insolvency consultants from 20% to 30% if the projected personal repayment scheme is employed, which will offer consultants and advisors on the island more incentives to lead discussions between borrowers and lenders to an agreement.
Eltoma Property have legal experts on hand to provide assistance with any property-related loans in Cyprus. Contact us for more information.