A bill on foreclosures and private auctions of mortgaged properties is expected to be finalised on Monday between the Cypriot authorities and the Troika mission (EC, the ECB and the IMF), which is on the island for the fifth review of Cyprus` economic adjustment programme.
Discussions between the authorities and Cyprus` lenders are focusing on striking the right balance between the rights of the borrower and the lenders. No meeting between the Troika heads and Minister of Finance Harris Georgiades has been set so far, but reliable sources have told CNA that a meeting may be scheduled later on to discuss the final details of the bill.
According to the same sources, the sticky issue of the discussions is the right of the borrower to dispute the auction and contest the price of the mortgaged property.
The text should be finalised by tomorrow at the latest, as the bill should be submitted to the Council of Ministers on Wednesday for approval and then submitted to the House of Representatives, while time should be given to the Law Office of the Republic for legal vetting.
The issue of foreclosures is believed to be the most important subject of the current review as the new framework providing for foreclosures and private auctions should have been implemented by June.
Based on the Memoradum of Understanding agreed with the Troika, primary residences are exempt from foreclosures until the entry into force of the legal framework governing corporate and personal insolvency procedure in the coming December.
The meeting between the Finance Minister, the Governor of Central Bank Chrystalla Georghadji and the Troika heads over the agreement on the fifth updated MOU is scheduled for Thursday, marking the conclusion of the fifth review.
Cyprus` lenders press for expediting foreclosures as they believe that this would encourage borrowers to repay their loans or agree on restructuring their loans. Debt restructuring is considered an important element of the Cypriot programme, as non-performing loans (loans in arrears over 90 days) in the Cypriot banking sector (both commercial banks and Cooperative Credit Institutions) have reached €27 billion.