Banks and asset managers decide to extend freeze on foreclosures

The associations representing Cyprus’ banks and credit acquiring companies have announced their decision to extend the period suspending foreclosures of primary residences worth up to €350,000, until the end of this year.

The Association of Cyprus Banks said in an announcement that it decided to implement the extension following a meeting on 1 November with President Nikos Christodoulides and Finance Minister Makis Keravnos.

Similarly, the Association of Credit Acquisition Companies and Credit Facilities Managers (SEDP) said that following consultations with the President of the Republic and government over the past few days, it has decided to extend the voluntary suspension of foreclosures that expired on 31 October, promising not to proceed with any foreclosures of primary residences worth up to €350,000 until 31 December 2023.

The banks

Speaking after the meeting, the banks association’s press spokesman Andreas Costouris said the decision to extend this measure was taken so as to give the government – as well as parliament and the banks themselves – the necessary time required to finish the public consultation and finalise the foreclosures framework.

He added that the association made clear to the government that this would be the last time the banks agree to any such move, as there needs to be a final settlement of the foreclosures issue.

"We have a common orientation with the state and especially the government for social sensitivity, for respect for vulnerable groups of borrowers,” said Costouris. “At the same time, with zero tolerance for strategic defaulters and with a loyal orientation towards the immediate, substantial and effective implementation of a framework that governs the processes of foreclosures," he said.

Asked whether the decision was risky and if it will impact on the “Rent to Buy” scheme, Costouris said the association was in constant and substantive communication with the finance ministry to ensure it is implemented in the best possible way.

He said suspensions always carry certain risks, and go against the Association’s principles, as it has been stressing for the past four years when parliament was insisting on suspending foreclosures.

“But we also believe that this is a substantial act of good will on our part, to complete the dialogue surrounding foreclosures,” said Costouris.

He welcomed the President’s initiative to become involved in the matter, saying Christodoulides has been closely consulting with the finance minister in recent weeks. Indicatively, he said, the latest meeting was arranged in the space of a few hours from when the previous suspension expired.

The credit acquiring companies

SEDP said it made the decision to extend the suspension in order to give the Finance Ministry and government time to complete their law proposals on the legal framework for foreclosures of primary residences worth up to €350,000.

In its announcement, the association said it hoped this will lead to a final settlement of the issue, in a way that will protect the vulnerable and cooperative borrowers.

It also revealed that all the association’s member credit acquiring companies have expressed interest in participating in the “Rent to Buy” scheme.