Swiss Franc Mortgages in Cyprus and the Problems for Property Owners

It is estimated that thousands of purchasers of properties in Cyprus from 2006 onwards will have been severely affected as a result of being advised by their Bank in Cyprus to take out their Housing Loan in the Swiss Franc denomination (CHF).

In the vast majority of the cases – although not all – the Banks in Cyprus had failed to provide to these purchasers any (or very little) information as to the very real risks inherent in these foreign currency Loans.

As a result, these property owners have seen their Swiss Franc Housing Loan repayments increase beyond all recognition, and most owners are now unable to service the ever-increasing instalments. These same property owners have all unfortunately found themselves in direct conflict with the Bank(s) in Cyprus as financial implications have forced the majority of owners to cease making the required Loan payments to their Bank.

What happens if an owner stops paying their Bank?

When property owners have fallen into a default position with their repayments and have ignored communications from their Bank requesting instalments be brought into line, the Banks in Cyprus have taken the step of issuing legal proceedings against the owners in Cyprus Courts in order to recover the amounts allegedly owed to the Bank through the Loan.

These Writs of Summons are then “served” to owners at their UK residences tasking them to appear before the Cyprus Court of issue within a period of typically 15 days. Failure to make the required appearance results in a Judgement in default being entered in the Cyprus Court in favour of the Bank. Such Judgements can and have then been enforced in the UK against the homes and assets of those owners.

It is critical if an individual is served in the UK with a Writ of Summons from Cyprus, they seek specialist legal advice in order to respond within the stated deadline. If not, there will be no opportunity to challenge the Judgement or its subsequent enforcement.

What are the potential solutions?

Where an owner does not wish to retain their property in Cyprus, it is possible with specialist advice to negotiate for the property to be given back to the Bank, this sees owners released from their obligations and able to continue their life free from any stress or fear for their future.

Where an owner wishes to retain their property in Cyprus, it is possible, again with specialist advice, to restructure the Loan with significant discounts; and in these cases, the owners carry on with their ownership, free from stress and in enjoyment of their properties in Cyprus.

Please see a more in-depth article with case studies here.

 

AIPP Members Judicare Law have behind them over a decade of experience assisting hundreds of owners who bought properties in Cyprus, so if you are encountering problems with your Bank in Cyprus, and don’t know where to turn or would simply like to have a no obligation consultation, one of their team would be happy to take your call on 01438 840258. Or alternatively, you may email them in confidence at admin@judicaregroup.com