K5 v Akfinans Bank | the Day After the Successful Verdict

My-villa-before-£1000s-spent-on-it_-540x405WITHOUT PREJUDICE

The events of yesterday are still somehow surreal. For those of you who are not aware, I have visited the District Court on well over 150 occasions and yet the one time the really good news was given, I was not there.

Many people see me as a very hard faced person who rarely shows any emotion other than anger. Believe me when I tell you, there have been times when I was so scared, putting one foot in front of the other was difficult. There were mornings when I have woken and not wanted to even get out of bed. I have had my life made  a living hell at times, reputation publicly smeared, had some I called friends turn on me and do the same.

The one thing that kept me going was my belief that I was right. Right to stand up to dishonesty, right to oppose bullying and right to keep fighting for what I believe in.

That is now in the past. I was right, yesterday Judge Talat Usar found that the mortgages put on the K5 homes were fraudulent, he overturned the repossession judgement and the auction. There is so much more to yesterday’s judgement I have still to learn. There is of course a strong possibility that Akfinans Bank Limited will Appeal to the High Court against yesterday’s judgement and they will have been given a time frame within which to do this.

However, if the bank do file for an Appeal, once this has been heard and the judgement rendered, it will be over in the TRNC. If K5 lose at the High Court, I have no doubt we will be going to Strasbourg. If we win and I think we have every chance of doing so, then the interesting job of enforcing the judgement begins.

This has been made doubly difficult for me as the bank have already transferred my villa into the name of a third party, suspiciously since the bank family openly use and occupy my villa and the name of the transferee also appears on the list of Directors at the same time as the former Finance Minister was also a Director.

How’s that for a coincidence, me…I do not believe in coincidences.

Never give in never give up.

Pauline Read

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7 comments to K5 v Akfinans Bank | the Day After the Successful Verdict

  • Polly Marples




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    Post “The Scourge of Stealth Mortgages”

    Posted on Facebook page today regarding K5 ‘s ruling in court. “Today the judge found the Mortgage and the Auction to be fraudulent.
    Fantastic news Yahoooooo. — feeling happy.” For those unaware, K5’s properties were auctioned several years ago as a result of a Stealth Mortgage. \It has been a case of waiting and waiting for the owners of the K5 site at Karsiyaka. What now happens? It has been suggested that the bank involved may well appeal, but for now, for those who do not know what is a ‘Stealth Mortgage ‘ and what is involved the following document has come my way, and I share it, in the hopes that it may inform and enlighten. This is not something written by KibKom and the team, but as I say, sent to us to be shared;|

    “To: Whom it concerns in TRNC Government and Turkey
    1) The effect of Stealth Mortgages on Property Purchasers in the TRNC

    It is estimated that there are currently 1000 purchasers in the TRNC who are affected by the application of ‘stealth mortgages’ on their properties, similar numbers of ex pats and Turkish Cypriots.

    ‘Stealth mortgages’ are usually arranged on ‘bare land’ between builders and TRNC banks after (or in some cases before) contracts have been raised to sell property to purchasers on the same land. In most cases without ever informing the purchaser of such a mortgage!

    These are allegedly fraudulent activities involving the builder, bank and Tapu, who all have responsibility for identifying any conflict of interest and need to advise any third party who may have interest in the activity. In most cases a third party is a purchaser making full payment according to contractual schedule, yet is not informed of the mortgage.

    When a builder defaults on such a stealth mortgage the bank seeks memoranda cover from all assets owned by the builder as well as the land described in the mortgage plus any immovable property then built upon it. Again, all parties involved – the builder, bank and Tapu, should check any third party interest and declare the activity for their attention.

    Finally after a further period the bank seeks a sale order for those assets it seeks to use to realise its outstanding credit. Again, all the parties involved – the builder, bank and Tapu, should check any third party interest and declare the activity for their attention.

    From this point the bank can seek an auction, to sell the builders assets and so recover its mortgage loan and all subsequent interest gained. NB. In most cases the interest applied to the mortgage loan will have been at a rate unsustainable by the builder, who then defaults.

    So the whole subject of ‘stealth mortgage’ appears to be an alleged scam for builders to deliberately take money from purchasers and then banks to take their properties too.

    The Government and Judiciary of the TRNC have made some attempt to strengthen the procedures alongside current laws to prevent such stealth mortgage activity continuing. But the outstanding problem has not been tackled, leaving property owners at the mercy of the skills of lawyers and the courts attempting to address the situation within existing laws.

    It is further alleged that banks have so much power over government and judiciary that there cannot be a fair trial. As a result in most cases all parties are recommended to make a settlement out of court. In this way the process can be continued in secret to the banks satisfaction, but the purchasers will be expected to pay for their properties more than once!
    If purchasers attempt to fight the activity and lose on technical points or without true support from the court in enforcing reasonable interpretation of the Laws of Equity and Benefit then their property can be sold by the bank and so they can lose everything!
    2) A need to file Cases against Turkey at the ECHR

    Most purchasers are not capable or wish to entertain the idea of paying twice for their properties. Affected purchasers have sought to defend their situation by going to trial.
    They believe the TRNC Laws of Equity and Benefit are sufficient to address the situation.
    But they need TRNC Judiciary to apply TRNC laws in their favour.

    NB. There are eminent men of justice can provide legal notes to identify just how a ‘stealth mortgage’ can be identified and dealt with using or simply updating existing laws of TRNC.
    Purchasers who fail to gain a fair legal remedy locally in the TRNC and who lose their properties will be obliged to file cases against TURKEY at the ECHR. But it is then expected Turkey would encourage TRNC to enforce existing laws or update them tp resolve the issue. With this obvious knowledge then why doesn’t TRNC Government do that now?
    There is currently a case involving 10 properties, which have been auctioned against alleged stealth mortgage operation. This is being fought at a District Court and a High Court appeal. * An ECHR case number is already lodged and may soon be needed to be formerly filed * (K5 Case v AKFINANS, now public – Fraudulant Mortgage judgement 4th December 2014!)
    There is also a current series of cases involving a common builder and bank. One sites had an alleged stealth mortgage applied which following default resulted in memoranda and sale orders being gained over all sites, involving some 50 properties. Sale orders have since been stayed and cases been opened at High Court for properties directly affected by the mortgage and District Court for the other sites. If these purchasers do not agree with blackmail of out of court settlement, but fight their cases and lose then they can lose their properties.
    If they lose their cases they will also be obliged to file ECHR cases against Turkey. That will be for another 50 properties, making 60 with those above. At an average value of say £150,000 per property these ECHR cases will amount to £9M, approaching 33M TL.
    If the curse of the stealth mortgage wins in this situation then up to a 1000 homeowners will lose their properties and the TRNC property sector will have been decimated!
    The TRNC will have lost massive income from further owner investment and expenditure. And having failed to gain a local remedy to their situation up to 1000 owners will be obliged to seek settlement by filing cases at the ECHR against Turkey; that’s up to 0.5BnTL!
    The ECHR prefers to apply judgement on similar cases in order to speed up overall activity. We are rapidly approaching a time when hundreds of purchasers will file similar cases.
    Up to 1000 affected purchasers are now becoming totally frustrated with lack of TRNC Government and Judicial action in resolving the stealth mortgage situation. They believe they can prove every effort has been made to seek local remedy of their problems and will now feel obliged to file cases at the ECHR against Turkey without any attempt to raise their case or go to trial in the TRNC! (Let’s hope the K5 case now reverses/overcomes this!)
    With this knowledge the TRNC Government should act now!
    3) Other considerations
    a) Civil versus criminal justice There needs to be consideration of how the situation has been dealt with simply as civil disputes when most of the activity of stealth mortgaging can be considered as criminal.
    b) Lobby groups and blackmail? There is a fundamental need to consider how powerful lobby groups or individuals can have so much effect on Government and Judiciary in the TRNC. This can be considered as corruption and needs dealing with urgently. Such activity which can bring down the reputation of the TRNC and in turn Turkey and may be considered as a form of treason?
    c) Suppression of free speech in the TRNC Local press / media are suppressed from reporting facts to the public. Lobby groups and individuals set up laws to prevent reporting of their activities and so abuse in secret.
    d) Bad Press for TRNC in the Free World Most affected purchasers are ex pats from Europe/EU where they are free to air their grievances in open speech, reporting and use of local and international media. They will be obliged to advise their countrymen to stay clear of TRNC. Why invite this to happen?
    4) The Way Forward for the TRNC
    e) Current Cases – Some 60 Properties involved – Urgent resolution sought now! Turkey can advise TRNC to stop all existing cases, take input from eminent legal representation, review with Government and judiciary, review existing laws as a remedy, amend and/or update these laws if insufficient to provide satisfactory remedy to purchasers through Equity and Benefit, resolve these cases through Equity and Benefit, cancel mortgages and/or remove purchasers from any liability within stealth mortgages and correctly transfer Kocans to purchaser who contracted to buy the land and property.
    f) Outstanding/Potential Cases – Balance 1,000 properties involved – Stop problem now! Create amnesty period to allow other purchasers who have the problem to register their cases with ombudsman who can determine their position within the revised situation. Where a clear cut Equity and Benefit remedy can be applied then this can be used to resolve the matter. For other cases then further Government and Judicial review and resolution will be required to ensure a reasonable outcome for the purchasers.
    g) No Further Cases – Recent updates to TRNC laws aim to prevent this whole activity!
    5) The Way Forward for Turkey
    Alleged stealth mortgages, criminal activity, lobbying/blackmailing and suppression of free speech; methods of corruption ruling a whole state should not be allowed in today’s TRNC. The operation of stealth mortgages in the TRNC should not result in Turkey suffering cases filed against it at the ECHR. Turkey should prove itself capable of removing this problem and enable a local remedy to be achieved by advising and enforcing correct standards of Law and Order in the TRNC that can also help with its entry to and support from the EU.
    6) Outstanding requests to get action from TRNC Government

    The original 8 Point Proposal originally submitted as an open letter to Irsen Kucuk, Prime Minister of TRNC, by the Making North Cyprus Better organisation reads: –

    It is now imperative that the TRNC Government take action to correct matters, to ensure that:

    1) Mortgage repossession proceedings be suspended with regard to all homes in TRNC until enacting new laws or reinforcing existing laws and procedures as outlined in this 8 point proposal.

    2) The rule of law prevails in North Cyprus and any indirect way of stealing is not allowed. There should be heavy penalties for ignoring TRNC laws or attempting to mislead the Courts. To confirm the TRNC Government is the ultimate guarantor of contracts and is obligated to fulfil their conditions.

    3) With the exceptions of undesirable aliens and designated land areas made known to Solicitors, that “permission to purchase” is a quick process and that contracts are registered as part of that process.

    4) Home buyers’ contracts signed in good faith are binding and are unequivocally respected by the Courts.

    5) The government instructs the Central Bank to notify all Banks that the rules of TRNC Mortgage Law 11/78 cannot be ignored by a creditor and that they will be enforced by the Courts. That for the avoidance of doubt, any creditor needs to search and declare any houses on any secured land and that any contracts of home buyers are binding on any creditor too.

    6) Homes cannot be taken away from residents without their knowledge or by fraudulent tricks. When a landowner or creditor allows a home to be built or sold on his land he cannot ignore the sales contracts and grab the homes of home buyers, as in 5 above any creditor is also bound by the same contracts.

    7) Kocans should be transferred to homebuyers as soon as they have completed their contracted obligations without any further payment to any creditor, landowner, developer or solicitor.

    8) The Government confirm that TRNC Kocans (Freeholds) are secure title and thatTurkey is the ultimate Guarantor.

    There is much more to read on the background to the problems with stealth mortgages and current situations at the Making North Cyprus Better web site – http://www.kkg2011.com/

    Some 1000 purchasers now await support and action………………………………..what is happening?

    Let’s remove the scourge of the Stealth mortgage in TRNC!

    Let’s get people believing in the TRNC again, let’s tidy up the property and banking sector, let’s encourage inward investment and so employment for the majority of people in TRNC!”

    (Comments are welcome from Kibkomers on this delicate and emotive subject.)

    Maid Marion of Malatya
    ‘Plan as if you will live for ever, but live each day as if it is your last.’

  • Polly Marples

    Now you see it…now you dont’t.

    The above appeared on kibkom then it was gone. Hope it was nothing I did.

  • Polly Marples

    Post The last issue of the Kibkom Times – issue 68

    Sorry to inform all that I have decided to pull the plug on the Kibkom Times. I have however, put something together as a final issue. I thank you all for you faithful readership. http://www.kibkomtimes.com

    I wonder if this has anything to do with the above post being removed?

  • Cyprus Sue

    It is on Kibkom but is in the news section. I feel it outlines the scale of the problem and the corruption involved in a very constructive way. It would appear that it has been read by 62 people but no comments as yet!

  • Polly Marples

    Yes, it started on the general where I saw it and copy and pasted it, then must have been moved. Good piece from MNCB site and a few well chosen words from Marions with Pauline’s comment from fb page.

  • fluter

    Yes, I just looked for it, and it has been removed. On who’s instructions, I wonder?

  • cyprusishome

    A purloined article was put into the news section but no real detail about the K5 court decision. WHY, it is the court decision that affects people that are fighting for their properties?

    But I suppose we should be thankful we have the news here and on FB