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Pandora's Opinion - Toxic Loans and Stealth Mortgages

pandoras-box-toxic-loans-and-stealth-mortgages/Without Prejudice

I would like to be able to say that the reason that the Turkish Republic of Northern Cyprus is so corrupt is because
it has been isolated from the rest of the world, with the exception of Turkey, for so long. I know that much can and does go on when a country is not subjected to the the scrutiny of the world, but that would not explain why the south of the island, the Republic of Cyprus, is also so corrupt, especially where property related fraud it concerned.

It seems that both sides of the divide operate in a similar manner when it comes to borrowing money against property they no longer own, or as in some cases, selling it without redeeming mortgages on the property/land.

One of the first things you are made aware of when buying in Cyprus is that the law is very similar to British Law because of the fact the Cyprus was a British Colony for so long. I would say that is stretching it somewhat.

Let us deal with the north first. This is where the waters become very murky. If as a foreigner you buy in the north, you must get permission to purchase. The advocate (solicitor) you employ will tell you this is a formality and you can go ahead with the purchase whilst your application is being processed; it is normal practice. What they often do not tell you is that whilst you are waiting, having completed the purchase, the property remains in the vendor’s name and you are vulnerable to his/her having pocketed your money or to further using your property as security against a loan (mortgage) without your knowledge or consent. Indeed the first you may know about this is when your property is about to be sold from under you because the former owner has defaulted on the debt he took on using your property as security.

In the north these types of loans have been termed ‘stealth mortgages’. Now here is the sting in the tail, the self same thing has been happening in the south where they have become known as ‘toxic loans’. Allegedly on both sides of the border, it has been suggested that there is collusion between the vendors, advocates/lawyers and the banks. It has even been suggested that the Land Registry Government departments have also been involved. What is clear is that on both sides, blame is being thrown at the feet of the purchasers and they do seem to be the losers in all this.

The Greek Cypriots shout that you should not be buying in the north, it is our land, firmly refusing to believe that the purchase is anyone’s responsibility but the vendor’s. We saw the Orams case do the rounds of the ROC, British and EU courts. I have never quite understood why they were the scapegoats rather than the Turkish Cypriot who sold the property to them, and the Government of the TRNC who allowed the transaction to take place. Allegedly Turkey funded the Orams’s case but has since abandoned them to their fate once the case was lost. The Muhtar still insists they must pay their dues on this house, which was ordered to be demolished by the EU courts, stating allegedly that he does not recognise the EU court’s decision. How disingenuous is that, since it was the TRNC/Turkey who encouraged this case and funded it. Would he have recognised the decision if it had gone in the Orams’s favour?

As an aside, who remembers a former British Prime Minister’s wife representing the Orams.

http://news.bbc.co.uk/1/hi/uk/4538960.stm

Tomorrow I will tell you about Memorandums, another of the TRNC’s goodies that defies logic and natural justice.

Pandora S Box

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5 comments to Pandora’s Box – Toxic Loans and Stealth Mortgages

  • Cyprus Sue

    There has been some success in the South with this issue. Not as a result of anything that the ROC government has done but purely because of the Troika who insisted that the backlog of title deeds is addressed and demanded that all parties that have paid in full must be given their deeds. Of course developers, the Banks and lawyers are not happy bunnies and are playing the victim card but justice for ROC buyers has been a long time coming. It has also helped that the ROC also have an effective pressure group (Cyprus Property News) unlike the TRNC which is ineffective.

  • Polly Marples

    Sadly Marion Stokes, who was a staunch campaigner is no longer with us, and of course Pauline Read is now back in the UK.

    Make North Cyprus Better is ineffectual and seem to be yes people.

  • NCFP Admin

    I still have the homebuyerspressuregroup.com domain if anyone wants to restart the group happy

  • Cyprus Sue

    No thanks!!!! Marion worked tirelessly but because of the wide spread corruption little was achieved. The most that seemed to happen was that people put in even more money to complete their homes, paid builders taxes and other expenses or ended up losing all their money and home.It was a real struggle for many to get deeds and it always appeared to end up costing several thousand pounds extra if you did get your deeds. One might say it was blackmail!
    I came to the conclusion long ago that the TRNC does not need a pressure group just simple straight forward advice ………..don’t buy there.

  • Malcolm Channing

    Back in 2005, on that website, I star-rated the Girne advocates based on the feedback given by their clients. Most had 1-stars. They threatened to sue me for £200,000 for defamation. I was told by the HBPG committee to take the ratings down. Backing down became quite common when whatever HBPG did was effective because the government, the builders and the advocates had the muscle and we didn’t.