Thousands are losing their homes through a growing wave of foreclosures, prompting MPs to call for urgent protections for homeowners facing repossession. On Monday, lawmakers indicated their intention to introduce measures aimed at safeguarding these individuals, including a proposal for a complete moratorium on foreclosures until 2026.
With parliament set to dissolve in mid-April ahead of the May legislative elections, discussions are ramping up. The House finance committee will meet on March 9 to debate around 30 legislative proposals, with both the finance minister and the governor of the Central Bank expected to attend.
Akel MP Aristos Damianou described the current situation as an ongoing “pogrom” of foreclosures, which he claims is leaving “thousands” without homes. He emphasised the need to restore balance between financial institutions and borrowers’ rights, criticising the government’s delay in addressing the foreclosures framework.
“The grace period is over,” Damianou stated, highlighting that existing foreclosure processes do not adequately protect homeowners or guarantors. Many repossessions are already at advanced stages, making reversal impossible.
The urgency of the matter is underscored by data presented by Greens MP Stavros Papadouris, revealing that a significant portion of foreclosures involve primary residences. He noted that 55 per cent of repossessions pertain to homes valued under €250,000, while 70 per cent concern those priced below €350,000. This €350,000 figure had been established by parliament years ago as a key threshold.
According to Papadouris, a majority of repossession cases stem from terminated loans, where lenders impose late payment penalties that exacerbate borrowers’ financial struggles. Despite credit-acquiring companies (CACs) reducing non-performing loans by approximately €5.7 billion, their total portfolios have ballooned due to accumulating interest, rising from €16 billion to €18.5 billion.
A significant complication lies in the lengthy court processes in Cyprus, which can extend for years. While repossessed properties are typically auctioned within six to nine months, borrowers may find themselves in limbo. “Even if they win their court case, they’re entitled to compensation, not their home,” warned Papadouris.
If no substantial changes are implemented, he cautioned, the crisis could escalate dramatically by 2026. One of the proposals from the Dipa party seeks to freeze foreclosures on properties valued under €350,000 for the entire year. Furthermore, Dipa suggests that decisions made by the financial ombudsman regarding disputes of €50,000 or less should be binding and final.
Dipa MP Marios Garoyian pointed out that some borrowers, despite their efforts, struggle to meet the full demands of creditors. This situation can lead to properties being auctioned for outstanding amounts as low as €5,000, €10,000, or €20,000, leaving many families vulnerable.
