Swiss Franc Mortgages in Cyprus

It is estimated that thousands of purchasers of immovable property in Cyprus from 2006 onwards may have been adversely affected by being advised by their Cypriot bank - in order to fund their purchase in Cyprus - to take a Housing Loan in the Swiss Franc denomination (CHF).

In the majority of cases we examine – although not all – the Banks in Cyprus had failed to provide to purchasers at the time of taking out the Housing Loans any information as to the risks inherent in these foreign currency lending facilities. And the complications which could arise as a consequence.

In the majority of cases also that we examine – although not all - the individual Bank had been introduced to the purchaser either by their Cypriot Developer, their Cypriot Lawyer or their Selling agent.

The Housing Loans effectively funded the purchase and stage payments were released by the Banks to the Developers in order to complete the construction of the properties. However in some cases, monies were released to Developers where little or no construction had actually taken place. Thus, leaving some purchasers in the extreme and bizarre position of having a Housing Loan agreement completely “drawn down” by their Developer but without having a property to show for the monies.

As a result of the foreign currency aspect of these Housing Loans these purchasers have seen their Swiss Franc loan repayments increase in some instances by as much as four times the original monthly projections given to them at the time of the Loan being taken. These increased payments have seen the purchasers unable to service the ever increasing instalments, and the purchasers have found themselves in direct conflict with the Banks in Cyprus as financial implications have forced the majority of clients to cease payments of the loans.

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

These Writs of Summons are then “served” to purchasers 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 purchasers.

We spoke with one of our clients about his experiences and his journey to a successful resolution.

We are one of the first legal firms to start fighting these cases on their merit in Cyprus courts - and not seeking to frustrate and/or challenge the Writs of Summons and their UK service in order to delay the legal process. This latter approach by various firms has seen purchasers entrenched in two legal disputes – one in the UK Courts and one in the Cyprus Courts – with all of the additional legal expenses associated.

We now have behind us many years of experience dealing with hundreds of clients who bought immovable properties in Cyprus. While others have created the above confusion for purchasers we continue weekly to achieve successful settlements for clients who have handed their property back to the Bank and continued their life free from any stress or fear for their future.

We continue also to reach settlements weekly with all of the Banks in Cyprus where our clients have successfully restructured their existing Loans or paid off their existing Loans with significant discounts; and can also carry on with their lives free from stress and in enjoyment of their properties in Cyprus.

If you are encountering issues in Cyprus with a foreign currency loan and don’t know where to turn, or if you are unsure about the legal guidance or strategy being followed by your current legal advisers, we continue to offer a no-cost no obligation initial review of a client’s documentation in order to assess the merits of their claims prior to incurring any legal costs.

If you would like to discuss your case or simply would like more information on our fixed fee approach one of the team will be happy to take your call on a confidential basis at 01438 840258 or via email to admin@judicaregroup.com