A wave of foreclosure notices for hundreds of primary residences and apartments is expected in the coming months.

The risk of the foreclosure crisis — the repossession of primary residences by banks and credit acquisition companies — exploding into a severe social problem for the government is only a matter of time.

According to data gathered by Brief, approximately 2,500 foreclosure notices are expected to be processed by December. These will affect primary homes, apartments, plots of land, agricultural fields, and shops.

Out of the 2,500 foreclosure notices, around 1,100 concern primary residences and apartments.

“It is possible that in a few months we will be facing the most tragic social problem since the displacement crisis of 1974,” commented a source familiar with the data from the Central Bank, financial institutions, and especially the credit acquisition companies, which have purchased the vast majority of non-performing loans from the banks.

The foreclosure notices are already “in waiting” and will begin to be sent out in July by the credit acquisition companies.

The issue of foreclosures and property recoveries was highlighted at an event organized last week by the Cyprus Consumers Association, entitled “The Legal Framework of Abusive Clauses and Foreclosures.”

Among the speakers at the event was Valentina Georgiadou, Financial Commissioner.

It appears from the data, part of which has been submitted to the House of Representatives, that the trend toward foreclosures or repossession of primary residences by credit acquisition companies is rising dramatically.

In the first half of 2024, around 45 primary residences went through the foreclosure and repossession process. In the second half of the year, until December 2024, 235 foreclosure notices were issued for primary residences.

In other words, within just six months, the number of foreclosure notices on primary homes — whether valued below €350,000 or above — has increased fivefold.

The situation is expected to worsen further, as new data is causing serious concern within the government and especially the Ministry of Finance.

An official source told Brief that the majority of foreclosures fail, but according to current law, after six months, the creditor or creditors can repossess the property.

“We are facing an extremely serious social problem,” stated Stavros Papadouris, one of the speakers at the Consumers Association event, who spoke in his capacity as honorary president of the Association for the Protection of Primary Residences and not as a Member of Parliament.

According to information obtained by Brief, the Central Bank is expected to send new foreclosure and repossession data to the House of Representatives in the coming days.

According to Brief, requests from borrowers with mortgages secured by their primary residence have been on the rise recently. A significant burden for insolvent borrowers are charges appearing on their accounts, and the Financial Commissioner’s Office is racing to have unjustified fees written off.

Within the government, officials have begun speaking of an impending “major social problem.”

Most stakeholders now admit that those involved with the Rent-to-Income Scheme should have considered more factors to make the criteria more flexible and protect more primary residences.

It has emerged that government officials are urging creditors to exhaust all options to accommodate borrowers, encouraging reasonable restructuring and repayment arrangements based on the incomes of those affected.

At the Ministry of Finance, it is believed that KEDIPES — 99% owned by the state — is approaching most cases of borrowers with mortgages on their primary residence in a more humane way, while still complying with the provisions of foreclosure legislation.