Auction of 460 square-metre house attracts protestors, no bids

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By Stelios Orphanides

Hellenic Bank was unsuccessful on Friday in selling a foreclosed house in Latsia, a Nicosia suburb, as the auction once more attracted protesters and not a single bid.

Members of the movement against foreclosures and the single parents’ association gathered at the auction venue to protest the bank’s intention to foreclose the residence of a single mother and her underage child, the Cyprus News Agency (CNA) reported.

The house, with a covered area totalling 460 square meters, is the collateral of a €600,000 loan extended to the family in 2010, a source familiar with the matter said in a telephone interview.

“They only paid a single monthly instalment and we never heard from them afterwards.” The reserve sale price at the auction stood at €400,000, the source said.

It is Hellenic Bank’s second unsuccessful attempt to foreclose a primary home in less than 90 days. On September 7, when Hellenic Bank attempted to auction a 263 square-meter house in Engomi, the members of the movement and representatives of political parties, including supporters of the far-right Elam, gathered in and outside the venue.

“Three days before the auction, they (the borrowers) contacted the bank offering to swap the house in exchange to the full amount of the loan,” the source said.

This version is confirmed by comments attributed to the chairwoman of the single parents’ association, Limassol-based lawyer Argentoula Ioannou.

“In this particular case, a bank ruling was issued concerning the family’s debt, but the young woman proposed to the bank to take the house at its estimated value of €600,000 and requested two or three months’ time to vacate the house,” Ioannou was quoted as saying by CNA. “Without hesitation and social sensitiveness, the bank proceeds with the auction at a minimum reserve price of €400,000; they don’t care that this family would lose their home and that with €400,000 the debt will not be settled.”

She also criticised Cypriot banks for foreclosing primary residences after they assured that they would only concentrate on commercial properties and added that the protest demonstrated “our decisiveness to defend the people’s right to a home, blatantly violated with this auction procedure.”

Ioannou said that borrowers should be aware of the meaning of the type “I” and type “IA” notification letters banks send. “They are new procedures, which have adopted the express auction procedure,” she continued. “The auction can take place in two months’ time and the people may find themselves on the street”.

The spokeswoman of the coordinating committee of the movement, Evgenia Moyseos, asked the public to join their cause to help fellow citizens at risk of becoming homeless, CNA said.

As the primary home receives no protection, and in the absence of a housing government policy, citizens have to fight for themselves, she said.

Cypriot banks, struggling with a non-performing loans ratio of 45 per cent are increasingly becoming impatient with uncooperative borrowers or strategic defaulters. Last year, Moody’s investors service estimated that in up to 20 per cent of cases of non-performing loans, borrowers are able to pay but they opt not to.

In January, Hellenic Bank, which has a delinquent loan ratio of 57 per cent as per June, entered an agreement with APS Holdings, a Czech non-performing loans specialist in an attempt to speed up debt collection.

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About Author

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

  • Disruptive

    What a joke.

  • Colin Evans

    When are Cypriots going to learn that if you take out a mortgage, of any size, you repay the monthly instalment. If you make no attempt, as is clearly the case here, to make repayments out on the street you go. It matters not one jot to the bank that she is a single mother. I just wonder how a Cypriot would feel if he went to the bank to draw out his money and the bank said, “None left, the mortgages have not been paid”? Then, and only then, will they get the message.

  • Didier Ouzaid

    Unless you’re prepared to let the former owners stay in ‘your new house’ rent-free ad vitam aeternam, you’d have to be crazy to buy a foreclosed primary residence here. That’s a sword above your head for at least a decade.

    “She also criticized Cypriot banks for foreclosing primary residences after they assured that they would only concentrate on commercial properties and added that the protest demonstrated “our decisiveness to defend the people’s right to a home, blatantly violated with this auction procedure.”

    And what happens when there are no more commercial properties to foreclose and there are still billions of un-serviced loans because a good bulk of them are secured against actual residences? Banks write them off completely? The rest of the taxpayers foot the bill for people that bought properties they couldnt afford or refinanced them to buy sh*t they couldnt afford?

    First off, the right to a home is convenient when others pay for it. Secondly, this is beyond any right to any home. This is just the right to free money so that you can live above your means. Sometimes I think I should refocus my real estate goals and aim to become a strategic defaulter, too.

  • John David

    Wish i could have my own home. can,t afford one,so i rent. I dont feel pity for any of these people that may lose their home,if you cant afford it then you shouldnt have it!

    • Mike

      A noble and sensible sentiment but in these days of ‘entitlement’ some want everything now but do not relish the thought aquiring the skills or undertaking the hard work that goes into accumulating the wealth to pay for it. It is a growing problem waiting to eventually burst.

  • LMS

    The banner they’re holding in the picture should read ‘mortgages without repayments’

    • Mike

      Or Cyprus without evictions – assuming both parties have stuck to the terms of their contract.

  • Cydee

    Quote: “They only paid a single monthly instalment and we never heard from them afterwards.”
    ‘they’ implies a couple, so where is the husband?

    • Mike

      Mother and child perhaps? Does that warrant a ‘they’.

  • Bunny

    The house, with a covered area totalling 460 square meters, is the collateral of a €600,000 loan extended to a single mother and her underage child. They only paid a single monthly instalment and the bank never heard from them afterwards.

    1. Why does a family of 2 require 460 m² of covered area?
    2. The bank is obviously at fault by extending such a loan, where a 3-room apartment would be more appropriate for a mother and child.
    3. The woman obviously committed a criminal act by false pretences of not intending to repay her loan.
    4. I suggest that it would be appropriate to provide her with a shared room in a place where there are iron bars over the window and the child taken into care
    5. The bank should offer the house by auction with no upset price or reserve to the highest bidder, even if they lose a packet – serve them right for being an accessory to a crime.
    6. the protesters should go home, as they have no real interest in the affair.

    • The answer to number 5 is the occupier still owes the shortfall, the bank doesn’t lose.

    • cyprus observer

      Well said.

  • Mike

    Having read that the reserve was €400K I now see why my offer of €50k (its real worth) was not considered.

  • Mike

    Of course, on the other hand she could take the bank to court for it to prove that it did in fact loan her tmoney and not just a figure on a computer screen. So seeing as the bank just creates debt in her name with the click of a button perhaps the courts can decide if the bank actually gave her any money at all – clearly not, so all she needs to know is how to send them a figure on a screen in order to cancel the debt. Even the interest cannot be charged as there was no money in the first place.

    • divadi bear

      Mike
      Have you ever known a bank to put the amount of a loan in cash into the borrower’s hand ?
      No serious business will accept “an entry in a bank account” of a borrower without proof of Collateral.
      Using a house, NOT having been paid for to the last cent, cannot be used as Collateral !
      The Builder or Real Estate company, (The Seller), obviously slipped up there before the woman gave her signature to “buy” the house !
      At the “end of the trail”, laziness of the Banks, Property Companies and the woman are guilty. She deserves to be homeless and bankrupt. If she is not an EU Citizen, send her back to from where she came !

      • Mike

        I think you have missed the point. Research ‘where money comes from’ or ‘how is money created’ if you can.

  • UandP

    If she is indeed so poor, then why does she live in a 600k property, she needs a lot of money to maintain it as well. I say BS! People who dont have money to buy property rent one, or at least buy something cheaper.

    • Mike

      I believe it comes under the generic heading of ‘Age of Entitlement’.

      • UandP

        Over-inflated case in Cyprus!

    • divadi bear

      UandP
      Have you never heard the saying:”Keeping up with the Jones’s ?”
      Many Cypriots have the false opinion of themselves, (an Inferiority Complex), that they sink themselves in debt just to go one better than their neighbours/relatives/friends !
      The blame for the very high amount of NPL’s lies with the banks ! The banks give out loans without doing a Mean’s Test to decide whether to give loans or not !
      Security required by any bank before giving a loan is not “a house or property with a mortgage on it or even a modest car on Hire Purchase”, it should have proof in form of a contract of employment for at least 2 years in the borrower’s name from his/her employer !
      A second loan before the first one has been paid back, should never even be considered.

  • cypbychoice

    They need to show a few series of Can,t pay we,ll take it away , with subtitles show them how the rest of the world treats people with debts

  • Douglas

    Fantasy Island continues to reign supreme here in Cyprus.

  • Neroli

    Are we suprised?

  • peemdubya

    “Last year, Moody’s investors service estimated that in up to 20 per cent of cases of non-performing loans, borrowers are able to pay but they opt not to.” says it all, really. I think that 20% is a bit low, though, and it about time we gained access to an updated list of “Lawmakers” who have NPLs with the various financial providers.

  • cyprus observer

    What a basket case this country is.

  • zemo munro

    Let me get this straight…A single woman with an underaged child is living in a house worth €600,000 and that’s based on a €600,000 loan extended to the family 7 years ago by the bank
    and the family only paid one or two monthly instalment on that loan 7 years ago? Um…err….What the hell’s going on in this country! Common sense would dictate that do gooders like the Members of the movement against foreclosures and the single parents’ association find this woman and her child an apartment that she can afford to rent and the Hellenic Bank give this woman notice to move!