Update............ Alpha Bank seeking to repossess British homes in Cyprus Published on September 30, 2012
OVER a thousand Britons who bought holiday homes in Cyprus face repossession as one of Greece’s major lenders, Alpha Bank, has launched legal procedures against them, The Times reported yesterday.
The Times said that hundreds of Britons stopped paying their mortgage as a direct result of an ongoing debt crisis and the changes this brought upon their mortgage terms.
The borrowers bought property in Cyprus in 2007 and 2008 on Swiss franc denominated mortgages, an advantageous agreement at the time because Swiss franc loans offered a much better interest rate, the Times said.
Instead of an 8 per cent interest rate available in Cyprus pounds (prior to the euro’s introduction) or sterling, borrowers could get half of that.
But since the credit crisis, the Swiss franc has been appreciating against currencies because of its solid reputation and Britons repaying mortgages in sterling now need to pay significantly more.
In September 2007, 2.43 Swiss francs was equivalent to £1.00, but in September 2012 it took just 1.51 Swiss francs to get £1.00. A British owner who had paid £424 a month in 2007 now has to pay £658 a month.
Alpha Bank Cyprus, a subsidiary of Greece's third biggest bank, has been serving writs demanding that borrowers, or a legal representative, appear in the District Court of Nicosia within ten days or judgement will be given in their absence, the Times said.
If the bank cannot retrieve the amount owed by selling the mortgaged property, then those affected may lose whatever other property they have to their name, including their UK home.
Alpha Bank argues that borrowers were asked to sign all the relevant legal documents, including declaration letters acknowledging that they fully understood the risks involved in borrowing in Swiss francs.
The Times said that property owners were prepared to fight in court, with one company, Regulatory Legal, acting on behalf of 750 homeowners and another, Judicare, representing hundreds more.
Regulatory Legal solicitor Gareth Fatchett said: “If [homeowners] do not fight this, they will face a judgement in Cyprus and the property will be sold but there will probably still be a debt. The bank can then pursue money through the courts in the UK, putting the debtors' assets, including their homes in Britain, at risk. This is a Waterloo moment for everyone because they are going to have to fight this."
Judicare’s Neil Heaney told the newspaper: "There are irregularities and issues with many of the loan documents. Many were signed by lawyers who were given power of attorney but these were not certified properly. This could invalidate the loan agreement."
Others may claim alleged foul play from the lender, with the Times saying they will claim that the bank colluded with developers, signing off payments before apartments were at the appropriate stage.
Alpha Bank officials could not be reached for comment yesterday.
Alpha Bank seeking to repossess British homes in Cyprus - Cyprus Mail 
