Success with problematic Cypriot property and Swiss Franc Mortgage.
Last week we negotiated a fantastic settlement for a client with a property in Cyprus and a Swiss Franc mortgage.
We have found trough experience that Cypriot property can be somewhat problematic to say the least due to issues with ownership and title deeds.
According to the Cyprus property action group, “The bulk of the problems stem from the archaic Ottoman land law still in existence in Cyprus which allow dubious practices.”
This, together with the lack of proper regulation of the industry or enforcement of planning and consumer protection law by the authorities only add to the risks of owning or selling property in Cyprus.
Title Deed Issues
In this case, our client had no title deeds for the property and it was in fact still in the name of the developer- an issue that tens of thousands of buyers face with title deed issues for properties purchased before legislation passed in 2011 to make the process easier for buyers and sellers.
Land Registry figures released in October 2008 show that 29,949 non-Cypriot property buyers are currently waiting for their Title Deeds and that during the preceding three and a half years, just 4,400 property Title Deeds were transferred to non-Cypriot property buyers.
Update on Swiss Franc Mortgage Products
Swiss franc mortgages were sold based on the exchange rate at the time which included a variable interest rate.
Major issues experienced by clients include:
- Rise in interest rate on their mortgage not highlighted at the time
- Exchange rate depreciation £ to SwFR 40% from 2008 to date
- The property is in Negative Equity
- Title deed Issues
In this case, the client’s property was in significant negative equity. With the Mortgage at €230,000 the property only initially valued at approximately €70,000 the client was facing an overall debt of €160,000.
Our client was finding it increasingly difficult to keep up with mortgage repayments, despite the property being tenanted, the rental income only covered enough to pay half the management fees. Our client’s financial situation was understandably becoming more stressed and unsustainable due to this financial burden.
Proactive Approach to the problem
Since last year we have seen an aggressive approach taken by Cypriot lenders, moving forward with debt collectors in the UK and serving writs on borrowers who have defaulted on their loan agreements.
The client was proactive and wanted to deal with the situation in the best way possible for all parties.
Following appointment, EU Property Solutions achieved a consensual sale of the property through negotiations with the developer and the lender, however the property only generated €30,000 leaving a shortfall of €200,000.
Our client wanted to try to settle the debt on a full and final basis and wanted to avoid a charge on their home in the UK.
Through extensive and laboured negotiations with the lender, developer, and client, our team at EU Property Solutions achieved a settlement figure of €10,000 on a shortfall of €200,000.
Eu Property Solutions achieved a debt write of off €190,000 and were able to safeguard the clients UK home and income. More importantly however, the client was freed of an overhanging debt burden that was taking a massive tole on their lives.
As we have seen with many clients, many overseas borrowers with Swiss Franc Mortgages are struggling to find a route out of this issue. Thankfully however, there are now options available if a proactive approach is taken with the correct intermediaries.
If you would like to speak to an expert on your current financial situation regarding a Swiss Franc Mortgage, problematic Cypriot property or indeed any property, please call Karen today on: 0330 124 1230.