New campaign starts in Cyprus to force developers to reveal extent of debts in title deeds scandal

[Nicholas Wallwork]

Campaigners in Cyprus are to hold a series of demonstrations aimed at trying to force the banks to*reveal details of mortgages taken out by property developers at the heart of the title deeds*scandal.

Tens of thousands of owners and real estate investors on the Mediterranean island don't have*legal titles because developers mortgaged the land to get money to build and they claim that they*were therefore duped.

Click Here to Read The Full Story and Add your Own Comments to New campaign starts in Cyprus to force developers to reveal extent of debts in title deeds scandal

 

[Cornholio]

Taking the campaign overseas............

Cyprus property market tarnished by London protest
By Nathan Morley
Published on March 30, 2010

TENS of thousands of prospective home-buyers were greeted with placards reading ‘Shame on Cyprus’ at the gates of a property exhibition in London over the weekend.

The signs were part of a high-profile campaign organised by Conor O’Dwyer who is embroiled in a lengthy legal battle with local developers.

His colourful protest, camped at the main entrance to Earls Court, was staged during the two-day A Place in the Sun show, an event designed to help people get onto the overseas property ladder.

The show was organised in conjunction with the popular Channel Four television programme, which draws millions of viewers every week.

Over 200 exhibitors, representing more than 40 countries worldwide witnessed the highly visible stand set up by O’Dwyer.

Despite objections from local property developers – many of whom were left fuming, O’Dwyer said he was allowed to stage the protest with the blessing of the Metropolitan police.

“Greek Cypriot property developers came out of Earls Court on masse, they were furious with me. Some took photos; it was worrying because I had my children there. Some even said they would take me to court.

“At first they wanted the stand to be taken down, but after I explained my situation, some of them expressed sympathy and one developer even offered to help, but many were not happy,” he said.

Thousands of property dealers and customers from Spain, France, Bulgaria, Turkey, Greece, Portugal, Italy and the USA were greeted by the protest, with many stopping to discover what was happening.

“It needs sorting out,” insists property analyst Nigel Howarth, “This has been going on for far too long. His case is high profile and who can even begin to calculate the damage by the negative press?”

O’Dwyer claims he purchased a house in the eastern village of Frenaros in 2005 that was then was resold without his knowledge by the developers.

The developers have dismissed the accusations and accused O’Dwyer of attempting to extort a more expensive house from them.

This is not the first time O’Dwyer has taken his campaign to the streets, two years-ago he held a protest outside the Cyprus High Commission in London.

O’Dwyer slept in a tent and spent his day updating his website and talking to passers-by, including, he said, potential British property buyers for Cyprus.

Cyprus property market tarnished by London protest - Cyprus Mail

 

[Cornholio]

Update............

Banks face more serious risks, Property Action Group says
By Stelios Orphanides
Published on November 7, 2010

CYPRUS BANKS may be exposed to greater risks related to the property market than those reported by rating agency Moody's last week, according to the leader of the Cyprus Property Action Group.

As the 8 per cent rebound of real estate transactions in the first ten months of the year indicates only a sluggish recovery of Cyprus' property market, buyers left with no title deeds because their properties have been mortgaged by developers have no possibility to resell their investment, according to Denis O'Hare.

This comes after the island's property market saw prices fall 8 per cent in 2009, which the Central Bank says may fall a further 4 per cent this year.

This price decline will put additional pressure on the portfolio of Cypriot banks, according to Moody's. The exposure of Cyprus' banking system to the real estate sector was 20 per cent on corporate loans totaling €20.1 million in March, according to the Central Bank of Cyprus. This ratio translates into over €5.7 billion of total real estate debt in March this year, down from €6.3 billion a year before. This 8.8 per cent annual decline followed a 66 per cent increase in March 2009 compared to the year before, according to the Central Bank.

Cyprus' banks may face additional risks in the form of fines based on provisions of the European Unfair Commercial Practices Directive 29/2005/EC. This directive was transposed into national law in Cyprus in July 2007 and states that it is a violation for a business to omit or hide material facts from buyers, which if had been made known, would have influenced the buyer’s purchasing decision. Violators face a fine of up to 5 per cent of their annual turnover or €256,290. In addition, preventing the Competition and Consumer Protection Service of the Ministry of Commerce, Industry and Tourism, responsible for the implementation of the said legislation, is an offence punishable with a fine of €85,430 or a six-month prison sentence or both.

O'Hare said the banks have violated the consumer protection law in question. "The banks that have a loan agreement with a property buyer are supposed to inform the buyer about material facts. As they know that the developers have mortgages on them" and "first priority" in foreclosures if the developer's mortgage turns in to a bad loan, he said.

The CPAG leader said there has been evidence of banks "trying to cover their reckless lending by rescheduling loans and handing out even more money," a practice that led to the intervention of the Central Bank. The latter asked commercial banks to "act within the rules for declaring and reporting non-performing loans. What is now crystal clear is that this orgy of lending has created a toxic debt time bomb for the banks with the developers unable to service the debt because of the world recession".

Non-performing loans to Cyprus' real estate sector as a percentage of total real estate loans rose to 4.4 per cent in March from 4.2 per cent a year before, or to €251.3 million from €231.8 million respectively, according to the Central Bank figures. This translates to an increase of 8.4 per cent in bad loans in the real estate sector.

O'Hare warned that unless the government acts now to prevent a "downward spiral" of the property market the banks will be left with "many collateral properties with highly inflated debt on them" which cannot be resold.

"Many local buyers who are struggling with mortgage repayments could cite the EU law which made it an offence for the bank not to inform them of any developer mortgage and simply cease to pay it while they seek redress. In addition, many foreign buyers who were sold property investments using buyer mortgages will have reason to just walk away from these bad investments, especially if they were in Swiss francs which have gone so badly wrong. This will mean that even more developers will go bust," the CPAG leader said.

Banks face more serious risks, Property Action Group says - Cyprus Mail