The parliament will vote Monday on 21 pieces of legislation overhauling the legal framework for foreclosures, guarantors, the Financial Ombudsman and insolvency — with some measures at risk of being referred back over constitutional concerns.
The Finance Committee wrapped up its deliberations on Thursday, deciding which of the proposed bills would be withdrawn, referred to the incoming parliament, or put to a plenary vote on Monday.
The most contested element concerns the Financial Ombudsman. Two government bills would make the Ombudsman’s decisions binding for complaints against financial firms up to €20,000, and would allow borrowers to approach the Ombudsman earlier — on receipt of a Type I letter rather than the current Type IA.
Financial Ombudsman Valentina Georgiаdou has opposed the bills, arguing they weaken the institution by giving creditors the right to challenge her rulings in court, including on the substance of a case.
ELAM and DEPA are both preparing amendments. ELAM wants the Ombudsman’s decisions to be fully binding and cases already finalised in court excluded from her remit; DEPA wants the binding threshold raised from €20,000 to €50,000.
19 of 26 private members’ bills will go to the plenary.
The most significant would shield primary residences valued up to €350,000, business premises up to €150,000 and agricultural property up to €200,000 from foreclosure — covering both debtors and guarantors, who could seek a court injunction to halt proceedings.
A separate bill would write off any outstanding balance after a foreclosure sale if the proceeds fall short of the full mortgage debt plus interest.
The same proposers would also bar banks from charging further interest once the total owed reaches double the original debt; the Finance Ministry has indicated it supports this measure for housing loans up to €350,000 taken out after the law takes effect.
Several bills focus on court access: an AKEL proposal would restore mortgage debtors’ right to invoke unfair contract terms as grounds for halting a foreclosure; a joint DIKO/EDEK bill would allow debtors to apply for a court injunction to suspend a sale; and a joint AKEL/DIKO/DEPA bill would give eligible debtors 21 days from receipt of a sale notice to appeal to the District Court.
An Ecologists bill would remove provisions that effectively block insolvent individuals from entering the insolvency framework.
Further bills address guarantor protections, the appointment of specialist judges, a foreclosure freeze and additional collateral restrictions on creditors.
The Finance Ministry has said it disagrees with the majority of the proposals.
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