‘Thousands losing their home through pogrom of foreclosures’

MPs on Monday signaled they will push to introduce additional protections for homeowners facing repossession, with one proposal even calling for a total halt on foreclosures throughout 2026.

Lawmakers set mid-April as their goal, as at that time parliament will dissolve ahead of the May legislative elections.

The discussion of the some 30 different legislative proposals will kick off in earnest on March 9 at the House finance committee, where both the finance minister and the governor of the Central Bank have been summoned.

Akel MP Aristos Damianou spoke of an ongoing “pogrom” of foreclosures with “thousands” of people losing their homes.

His party’s proposals aim to “re-establish a balance” between financial institutions and the rights of borrowers.

For years, said Damianou, the government has delayed changes to the foreclosures framework by promising to bring proposals of its own.

Now the grace period is over, he added.

Current procedures relating to foreclosures do not give homeowners or loan guarantors adequate protections; meanwhile many repossessions are at an advanced stage and cannot be reversed.

The goal, stressed Damianou, is to stem the tide of foreclosures, to at least “protect future generations”.

Greens MP Stavros Papadouris cited data showing that the majority of foreclosures concern primary residences.

Specifically, 55 per cent of repossessions concern homes valued at under €250,000, and 70 per cent homes valued under €350,000.

The €350,000 number was set as a threshold of sorts by parliament years ago.

And according to Papadouris, most repossession cases relate to terminated loans – where the loan agreement has been prematurely terminated due to default. In these cases, lenders charge interest on late payment, which further increases the debt.

The MP cited market trends which he called alarming. For example, even though credit-acquiring companies (CACs) have reduced non-performing loans by some €5.7 billion, their total portfolio has actually increased due to interest on late payments – ranging from nine to 12 per cent.

When they first started business, CACs had around €16 billion in problematic loans to manage; today that number has risen to €18.5 billion.

CACs are licensed entities authorised by the Central Bank to purchase and manage loan portfolios, primarily non-performing loans, from financial institutions. Key companies include B2Kapital, CAC Coral, doValue Cyprus, Gordian Servicing, and Themis Portfolio Management.

A major issue, said Papadouris, is the length of time that courts in Cyprus take to rule on repossession cases. Court cases may drag on for several years, whereas repossessed properties get auctioned off in six to nine months.

“In the interim, repossessions take place, leaving borrowers in the lurch. And even if they go on to win their court case, they’re entitled to compensation and not their home.”

He warned that unless serious changes come about, “in 2026 we will see things we’ve never seen before”.

One of the bills tabled, by the Dipa party, aims to suspend any foreclosures on properties under €350,000 for the duration of the year.

In addition, Dipa proposes that any decision by the financial ombudsman be binding and final, where the amount disputed by the parties – borrowers and lenders – is €50,000 or less.

Dipa MP Marios Garoyian explained that there are instances where, despite borrowers’ best efforts, they are unable to pay back the full amount demanded by creditors.

“Which means that for amounts as low as €5,000 or €10,000 or €20,000, a case remains open and then a property gets auctioned off.”