BOC contests court ruling banning application of new foreclosure law

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By Stelios Orphanides

Bank of Cyprus has filed an appeal against the ruling of the Larnaca district court, which banned it from applying the modernised foreclosure law in disposing a collateral for which a court ruling existed based on the previous legislation.

The Cyprus Business Mail understands that the appeal was filed on Thursday. Bank of Cyprus declined to comment.

In its September 12 ruling concerning a 2007 mortgage deal, the court ruled that Bank of Cyprus had to proceed to the foreclosure of the property based on a 2006 court order and had therefore no right to send a “type I” note to the owner. The ruling caused perplexity in Cyprus’s banking system.

The Association of Cyprus Banks said in a statement “it has reservations about the ruling” concerning its legal drafting and therefore intended to study the underlying legislation in-depth.

The modernisation of the foreclosure law was part of Cyprus’s bailout terms, aiming at helping speed up foreclosure procedures, which under the old law took ten years or longer, thus helping reduce the non-performing loan portfolio of Cypriot banks.

In an interview to Inbusiness.com, finance minister Harris Georgiades said that he was not in favour of changing the law as it would cause uncertainty. Still, government agencies monitor the situation waiting for banks to evaluate the ruling to determine which old cases are affected, he said.

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About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • GSP

    I read the whole article twice – I still do not understand what they are trying to say.

    • hello :)

      aaaah….thank god…I thought I was the only one…:D

      what I understood is :
      – to foreclose a property before 2007, the procedure was very slow
      – so they’ve decided to pass a law in 2007 allowing a faster procedure, this faster procedure starts with the bank sending a type 1 letter to the owner
      -but in this case, it was in 2006 that the court decided the bank should foreclose the house, so the bank is forced to use the slow (2006) procedure.
      The bankers being smart ar*sses, they’ve decided to send a type 1 letter to the owner, hoping to get the foreclosure process on the (set up in 2007) fast track…nice try…:D

      Not sure about what I’m writing but more or less, I think this is how it works.

      • Mist

        Spot on, all hinges if the 2007 law is retrospective.

  • Douglas Murphy

    Where is that useless ‘Troika’ when needed 🙂