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Financial Mirror (Cyprus) - - FRONT PAGE -

The re­vised bill on fore­clo­sures that is ex­pected to be de­bated and passed by par­lia­ment in order to se­cure the sixth tranche of 453 mln eu­ros in bailout money from the Troika of in­ter­na­tional lenders.

The pri­mary home (ie. the owner is proven to be liv­ing there per­ma­nently) has been safe­guarded only when the owner can prove lack of in­come or any other as­set, thus en­sur­ing low-in­come fam­i­lies do not lose the roof over their heads.

The new bill says that lenders can auc­tion or sell mort­gaged prop­er­ties with­out the in­volve­ment of state ser­vices, even though the two par­ties may also re­sort to the Land Reg­istry De­part­ment, that so far had the ex­clu­sive right to sell or auc­tion. The bill’s pro­vi­sions in­clude: - The sale will be­gin 90 days af­ter the last due pay­ment (up from the present 30 days), dur­ing which time the prop­erty owner may seek to re­struc­ture the debt or ask for me­di­a­tion, or even re­sort to the courts over credit fa­cil­ity dis­putes, dur­ing which time the fore­clo­sure process is sus­pended. Af­ter 90 days, the lender must no­tify the owner to set­tle the out­stand­ing amount or fore­close, with a fur­ther 30 days al­lowed for dis­pute. If the prop­erty owner does not con­form, the lender will call for an auc­tion within 30 days, when the owner may once again dis­pute the fi­nal ac­tion in court if the terms of the mort­gage have been vi­o­lated, the owner was not no­ti­fied prop­erly, the no­tice was is­sued prior to the ex­pi­ra­tion of the due date of last pay­ment, or, if there is any other out­stand­ing court case.

- The lender must give ten days no­tice to ap­point a prop­erty val­uer to as­sess the sale price of the mort­gaged prop­erty and then ap­point a sec­ond val­uer. The two, and in­de­pen­dent of each other, must then de­liver their val­u­a­tion to the prop­erty owner and the lender within 30 days. If the dif­fer­ence be­tween the two does not ex­ceed 25%, then the sale value is de­ter­mined by the av­er­age of the two. If the dif­fer­ence ex­ceeds 25% then, within five days, the lender must ask the Tech­ni­cal Cham­ber ETEK to ap­point a third val­uer who, within a fur­ther 30 days, must sub­mit his own as­sess­ment. The sale price will be the av­er­age of the two me­dian prices of the three valu­a­tions.

- The ini­tial sale is con­ducted by the lender only by auc­tion which de­ter­mines the re­serve price as 80% of the prop­erty’s value and no less. If there is no in­ter­est, the lender may try again for up to three months by auc­tion or di­rect sale, with the re­serve price re­main­ing at no less than 80% of the value. If the prop­erty re­mains un­sold, the re­serve price can drop to 50% of the value for a pe­riod of nine months. The cy­cle may be re­peated, but re­tain­ing a re­serve price of no less than 50% of the fair value.

- The lender may buy the mort­gaged prop­erty only af­ter 12 months from the start of fore­clo­sure.

- The whole process may be re­peated ev­ery year un­til the prop­erty is sold.

If the mort­gaged prop­erty is the pri­mary home, then the new bill will be ap­pli­ca­ble af­ter Jan­uary 1, 2015, when the in­sol­vency law comes into force, which also pro­vides for the pro­tec­tion of the pri­mary home and a quick re­solve of out­stand­ing debts only in the case when the owner is proven not to have any in­come or other as­sets.

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