In a move that shines a brutal spotlight on the aggressive tactics deployed by debt-recovery players, the parliamentary refugee committee this week demanded that vulture funds place all foreclosure procedures on hold for three months.
The call came as committee members expressed deep concern that the behaviours they’re witnessing “put loan-sharks to shame”.
Committee president Nikos Kettiros urged the companies to delay foreclosures of main residences for three months, providing a window for dialogue and constructive solutions with borrowers.
He also insisted that borrowers living in refugee settlements, and other vulnerable groups, should use this time to approach the companies to restructure and facilitate their loans.
Kettiros warned: “If there is no response, parliament will consider legislative interventions to protect the vulnerable borrowers.” The committee plans to reconvene after the Christmas holidays to evaluate whether the vulture funds have engaged. If the firms fail to open talks, the threatened legislation may swiftly follow.
Importantly, Kettiros clarified, the committee was not calling for loan write-offs. Rather, it asserted it is within the interest of the vulture funds themselves not to render families homeless.
Data from state-owned asset-management company Kedipes revealed that 763 houses in refugee settlements are mortgaged in non-performing loans, with a further 599 cases handled by vulture fundss. The stark reality is that “the main home in Cyprus is protected by no one,” Kettiros said.
Borrowers reported facing “threats and humiliation” when attempting to regularise their loans, he added. “These refugees were driven out of their homes in 1974 and the only thing they are asking for now is to die in dignity in the small houses in the settlements.”
The president also described it as “unthinkable” that the finance ministry should remain “a mere observer” while this crisis unfolds.
Jenny Papacharalambous, head of the association for the protection of borrowers, condemned the situation as “unacceptable for these people to become refugees for a second time”.
Her organisation has called on the companies to reach out individually to each borrower now at risk. They estimate 512 cases with vulture funds and nearly double that number with Kedipes. One of their proposals: allowing elderly refugees to remain in their homes by paying a reduced rent.
The association highlighted how fiscal illiteracy is deepening the crisis: many borrowers did not understand what the foreclosure letters meant until it was too late. During committee discussions, DISY MP Rita Superman pointed to the need for legislative backup if necessary, citing the case of a refugee single-mother with special-needs child who risks losing her home over a mere €20,000 loan.
DIKO MP Zacharias Koulias launched a blistering attack on the state and banks, labelling their conduct “unprecedented dishonesty”. He blamed the 2013 “haircut” crisis for the chaos borrowers now face. “There are loans that from €190,000 skyrocketed to €4.5 million. Not even loan-sharks do such business,” he stated.
The intervention marks a turning point. Vulture funds that have snapped up non-performing loans of distressed homeowners in Cyprus are now under parliamentary fire.
With legislation on the table, the next three months may prove critical for hundreds of vulnerable families facing eviction and for the real-estate sector’s reputation.
