The “informal” freeze on the sale of primary residences worth up to €350,000 may be the Government’s proposal to avert the Parliament on Thursday to change the island’s legal framework for foreclosures.
President Nikos Christodoulides on Tuesday met with heads of banks and asset management firms in an attempt to find a compromise formula. That is, one that would protect borrowers on the one hand and prevent repercussions on the economy and the banking system on the other hand.
Cyprus tries to avoid sending negative signals to foreign bank rating agencies, Philenews reports.
The Government is trying to prevent the voting in on Thursday of a controversial amendment bill on foreclosures proposed by main opposition Akel. It is backed by a House majority formed by far-right Elam, socialist Edek, centre-right Dipa, the Green party, three centre Diko MPs and two independent MPs.
The amended bill basically allows borrowers a recourse to courts but also secures a decree for the suspension of the sale of primary residential properties.
In particular, President Christodoulides called on creditors to provide a safety net until October or the end of the year for vulnerable borrowers until measures he is promoting are put in place.
Both commercial banks and asset management firms are expected to make announcements pointing out their commitment to putting aside foreclosures for main residences worth up to €350,000 until October.
