Bill to halt auctions for ‘Mortgage-to-rent’ applicants passed
By a unanimous vote the House on Thursday passed legislation that provides for halting the auctioning off of properties where the mortgage debtor has applied for the ‘Mortgage-to-Rent’ scheme.
It concerns auctions on first dwellings.
And under an amendment that also passed, suspending these auctions was expanded to include debtors who applied to the ‘Mortgage-to-Rent’ but were turned down. If an individual has appealed their rejection, and for as long as the appeals process is ongoing in court, they are likewise protected from having their property auctioned off.
Tabled by a group of Akel MPs, the legislation aimed to amend the main foreclosures law, affording additional legal recourse to debtors so that they’re able to set aside the sale of a mortgaged property.
Speaking on the House floor, Akel MP Andreas Pashiourtidis said this gives extra protection to people at risk of losing their homes. Even though banks have given verbal assurances not to foreclose on properties, he said, anecdotal evidence suggests otherwise.
Under a mortgage-to-rent scheme, intended to help homeowners at risk of losing their property due to mortgage arrears, a person voluntarily surrenders ownership of their home for five years to their lender. An entity – in this case the state-owned asset management company Kedipes – buys the home from the lender and becomes the landlord. During that time, the borrower no longer owns their home but will continue living in it as a tenant.
Furthermore, the scheme stipulates that applicants who meet the basic criteria – provided they have a title deed – will transfer the title to Kedipes, which at the same time will sign a 14-year rental contract with the individual concerned.
Moreover, under this plan, the state will cover the rent for a period of 14 years, with an option for the previous owner to re-acquire the property after five years.
This gives the tenant, meaning the previous owner, or a first-degree relative, the right to repurchase the residence.
Also eligible are borrowers with a primary residence valued up to €350,000 which was previously considered non-viable for inclusion in other housing schemes, such as the ‘Oikia’ initiative, as well as individuals whose participation in such housing schemes has expired or ceased.
The ‘Mortgage-to-Rent’ scheme was launched in early December 2023. At the time of the rollout, Kedipes – in charge of implementing the scheme – said hundreds of people called to enquire about it.
Copyright Cyprus Mail