Specifically, in a statement, the Office of the Financial Ombudsman Paul Ioannou said that on 14/12/2021, a borrower submitted a complaint form to the Financial Ombudsman regarding the divestment intentions of B2Kapital Cyprus Ltd, which bought out his loan obligations, in relation to a property mortgaged against them, seeking the Commissioner's assistance in suspending the auction and giving his daughter the right to proceed to secure a mortgage loan, as the company "clearly states the amount of the appraised value".
It is noted that the borrower, as proof of his willingness to cooperate, gave the company the sum of €31,000.
In the notice, the Commissioner states that "because my Office, in examining the aforementioned complaint, found that since 17/7/2021 a court decision was issued on the dispute underlying the said complaint, I was obliged to terminate it, following a relevant provision of the Law on the Establishment and Operation of the Unified Body for the Out-of-Court Settlement of Financial Disputes of 2010, which sets out my responsibilities for the procedure for examining complaints."
"Notwithstanding the above provision and the consequent termination of the examination of the complaint", the Financial Commissioner states that, "acting under the provisions of Article 4 of the aforementioned Law,[1] he sent a letter to the Company, requesting it to consider the immediate suspension and or cancellation of the planned liquidation procedure, in order to give the parties concerned the necessary time to make every effort to find a solution" and adds that "in the same letter, I also pointed out that the property under sale is the principal residence of the Complainant's daughter, according to institutional testimony before me" and that the Complainant's daughter, "is already in the process of securing a loan from another lending institution".
In the communication, the Financial Commissioner states that on 28 December 2021, his Office received an email stating that B2Kapital Cyprus ("Company") Ltd has proceeded to suspend the sale of mortgage Y2355/2007, which was set for 29.12.2021, "as a sign of goodwill in a last-ditch effort to find a consensual and mutually acceptable settlement".
The Financial Commissioner reiterates that it is not his responsibility to intervene to suspend and or cancel divestment proceedings and adds that "our job is to help prevent such proceedings, assuming that our concerned fellow citizens express timely interest in addressing their disputes with the banking system and or licensed Credit Acquisition Companies".
"That is, they express such interest before or immediately after receiving Letter I, which is sent to them well before the start of the divestment procedures," it says, adding that "timely recourse to the Commissioner can trigger the implementation of all relevant CBC Directives to achieve fair and reasonable restructuring of non-performing loans, which is the most rational and effective way to prevent divestments."
Moreover, on this occasion, the Commissioner states that, "unfortunately, as conditions have developed since 2012, it seems to be inevitable that the banking system may gradually be forced to promote irreversible divestment procedures for most categories of property, including properties that constitute a principal residence and/or a commercial property".
The Financial Commissioner therefore states that "our fellow citizens with non-performing loans should act swiftly, working with their lender, to achieve restructuring solutions, as outlined above".
At the same time, it states that "the State (Government and Parliament) should put in place without delay the various, from time to time, promised plans for the protection of primary residences and professional housing, in order to avoid serious socio-economic consequences from the destruction of families and the closure of businesses".
"Closing down a business and liquidating its assets is an inevitably damaging form of disinvestment and dangerously undermines the private sector's growth effort, creating obvious socio-economic problems," he added.
In any case, according to the Financial Commissioner, "it should be clear that neither banks nor the SCCs have an obligation to conduct social policy, which in the context of a rule of law is the exclusive responsibility and competence of the State (Government and Parliament)."
Finally, the Commissioner thanks B2Kapital Cyprus, for adopting his recommendations and suggestions, as well as "for their over time excellent and smooth cooperation, both with their management and staff."
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