Financial Commissioner Pavlos Ioannou suspended the sales of three mortgaged properties.
Specifically, as the Commissioner states in his announcement, the three cases of suspension and / or cancellation of the sale process, were achieved in cooperation not with banking institutions but with a Credit Acquisition company and KEDIPES. This development is a strategic improvement in terms of the role of out-of-court settlement of financial disputes, in particular in expanding the scope of acceptance of the Financial Commissioner for constructive interventions, in the context of legality and the effort for rational settlement of problematic the need to resort to divestiture procedures is minimized.
This is the announcement of the Financial Commissioner:
WITH THIS Information Note, I inform our fellow citizens that the Office of the Financial Commissioner has arranged, once again, the suspension of the sale of three mortgaged real estate of our fellow citizens. It is clarified that, two of the three auctions were held in collaboration with Gordian Holdings Ltd and Themis Portfolio Management respectively, which undertook the management of part of the non-performing loans of Bank of Cyprus, as Credit Redemption Companies. The third case concerns the suspension of a planned sale of a property by KEDIPES Ltd, which was attached for the second time to the same property, but in order to complete the process of settling the outstanding issue, again after the intervention of the Financial Commissioner. It is clarified that the settlement of the cases under discussion took place after the adoption of my suggestions, for the reasons that I will explain below.
The first case
IN RELATION to the sale scheduled for 19/10/2021, a relevant e-mail was received from my Office by the interested party, with the request as the Financial Commissioner intervenes, in order to suspend the planned sale of her main residence in Nicosia, for at least 6 months. An excerpt from this e-mail, which referred to the following:
“I personally have a serious health problem for several years and I have to have another operation before the end of the year. At the same time, my husband has been suffering from Non – Hodgkin ' s lymphoma for years. We are both unemployed and please mediate for the suspension of the sale for at least 6 months. [….] The issue is really very humanitarian and aggravates my state of health “.
IN view of the above information and after processing information related to the case under discussion, our Office sent, on the same day, a letter to Gordian Holdings Ltd. Our suggestion was to suspend the planned sale for a period of about 5 months, in order to provide sufficient time for those interested to proceed with the sale of their property, in order to repay the balance they retain in the SPD and maintain the ownership of the main residence their.
A FEW DAYS later, and following a previous telephone conversation between the Commissioner and the Head of Regulatory Compliance of Gordian Holdings Ltd, my Office received a relevant e-mail from him, in which the conditions for the suspension of the sale process were clearly stated. In particular, it stated, literally, the following:
• The intended auction concerning the mortgage property with No. Registration …, φ / σχ …, part: …, piece: …, at Agios Andreas, Nicosia District, and which was determined to be carried out / carried out through an electronic auction system www.eauction-cy. com on 26/10/2021, the time … is also suspended on 28/03/2022, the time …, in the same way and / or procedure, at the same time and with the same reserved price as the Auction Notice “Bulletin A” dated 02/08/2021.
• The Applicant will state that he has been informed of the content of the type Notices “I”, “I”, “IA”, “IB” and “M” and that he accepts that the auction of the aforementioned mortgaged property is rescheduled on 28/03/2022 without re-sending Type Notices “Θ”, “Ι”, “ΙΑ”, “ΙΒ” “ΙΓ” or any other notifications which are provided by Part VIA of the Law on Transfer and Mortgage of Real Estate of 1965 (Law 9 / 1965) or any other law or regulation.
• The Applicant will further state that in the event that Gordian re-submits the Type M notice, or any other notice provided by the relevant Law, it will not proceed with any procedure to cancel or set it aside.
The letter sent to us by Gordian Holdings Ltd also states the following:
“It is noted that the above terms were accepted by the Debtors and we proceeded to the issuance of the agreed court decision and suspension of the auction as mentioned above. We emphasize that the above decision was taken exceptionally, in the context of the declared effort to continue the good cooperation of Gordian with the Office of the Financial Commissioner “.
The second case
In the second case, on Wednesday 27/10/21, I received a visit to my Office from the borrower-interested party, who informed me that Themis Portfolio Management intends to proceed with the auction of its first residence, in an area of Limassol province. It is noted that the interested party is a low-income single parent, a fact that may make it impossible to service her loan obligation at this stage. In addition, according to the letter of the lawyer of the interested party, she has already submitted an objection to the Home Plan, with the request to reconsider her case, in order to protect her main residence. The excerpt from this letter is indicative:
“In view of the above, but also the fact that my client has, with an objection dated 23/3/2021 in the Estia Plan, requested a review of her case for the protection of her home, my client asks for your help to given by the company THEMIS PORTFOLIO MANAGEMENT HOLDINGS LIMITED period of suspension of the sale process for 4-5 months, until its efforts to find the necessary amount to pay off its financial obligations to the company. Keep in mind that my client is making efforts to sell a house and a large plot of land located in the village of Kellaki to pay off these obligations and therefore we ask for your intervention to suspend the process of selling her house “.
The FINANCIAL COMMITTEE , taking into account the humanitarian nature of its problem, but also the existing possibility of resolving the outstanding issue, without resorting to the sale process, contacted Themis Portfolio Management. His suggestion was to suspend plans for the sale process of the main residence of the interested party for a period of at least 4 months, in order to utilize real estate belonging to her mother, for full and complete settlement of her loan obligations to the underlying non-performing loan.
The COMPANY replied to me late in the afternoon of October 28, 2021, that it intends to fully satisfy my request, granting the suspension of sale procedures, until 15/3/2022.
The third case
The SPECIFICITY of this case lies in the fact that the Commissioner intervened for the second time, in order to suspend a planned sale of a property in Paphos, with the sole purpose of completing the sale of a property, the product of which was designed to be repaid to the borrowers. It is noted that the Financial Commissioner contributed a number of interventions to the promotion of this restructuring arrangement.
The insurmountable need for timely utilization of existing institutions by borrowers
I RETURN again to the strategically important moral lesson of the above cases. First and foremost, I repeat that it is not the job of the Financial Commissioner to cancel or suspend divestitures. The Office's job is to prevent non-performing loans from ending up in the sale process. In this regard, I would like to point out once again that the timely recourse of borrowers to existing institutions, as well as to other relevant legislation, contributes to the most effective possible protection of their financial interests. Obviously, in this case, the borrowers, while receiving the letter type “I” from the Banking Institution several months ago, and in fact long before it proceeded with the sale procedures, did not act in time to prevent the possibility of sale through restructuring procedures. or else how.
RECALLS, again, that it is the duty of the interested parties, upon receipt of the letter type “I”, in which reference is made to the Debt Management Directive of 2015 of the Central Bank of Cyprus, and consequently to the institution of the Financial Commissioner. when this is allowed by the Law of 2010 on the Establishment and Operation of the Single Body of Out-of-Court Settlement of Disputes of Financial Nature, as amended or replaced in each case, to proceed to the immediate utilization of the relevant procedures. Therefore, I call on borrowers for the umpteenth time to act in this direction to protect their interests, immediately upon receipt of the letter “I” and not upon receipt of the notice of sale. It goes without saying, however, that they have to act much earlier, that is, as soon as they find themselves unable to service their loan obligations.
ON THE OCCASION of the suspension of the auction program under discussion, at this point I consider it my obligation to thank the managers of Gordian Holdings Ltd, both its Management and its officers, but also of Themis Portfolio Management, and in particular its General Manager in on behalf of the Company, Mr. Panikos Mouzouris, who, acting in good faith, in the service of the public interest, but also for the purpose of satisfying the urgent need to solve humanitarian problems, accepted my suggestions for the suspension of the sale processes they were promoting. Finally, we warmly thank KEDIPES Ltd and specifically its Executive Director, Mr. Mario Papadopoulos, for the adoption of my suggestions and proposals, as mentioned above. An important role in the arrangements reached is always played by the staff of my Office, who work tirelessly and very often outside of their normal working hours, with full dedication to the Office and to the Law that governs our responsibilities.