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14 Jun 11

Alpha Bank Swiss Franc Mortgage Problems Loom In Cyprus

As the world economy continues to be squeezed and no where more so than in Europe we are starting to see evidence of overseas property owners struggling to keep up payments on mortgages taken out on holiday homes when the market was buoyant.

Increasingly people are looking for advice on how to get out of mortgage deals that they feel have been badly sold.

In Cyprus one of the biggest problems is where people have signed up to a Swiss franc mortgage with The Alpha Bank. Essentially these mortgages work well while the currency exchange rates are stable, but with recent turbulence in the currency markets we have seen increasing that people mortgage payments have increased while the value of their overseas property has decreased sharply.

The problem is further compounded when basic rules when taking out a mortgage have been ignored and mortgage products have not been explained properly. Below is an extract from a recent enquiry from Mr David Henderson which highlights the issue:.

Hi, I have an issue with a mortgage with Alpha bank and illegal power of attorney who signing me and 31 other people up for mortgage deals that we never asked for. We were not advised of mortgage options or costs and were signed up for a swiss franc mortgage which has recently double in debt due to currency. The power of attorney was signed by a stranger in a travel agents shop in Manchester, U.K. apparently illegal. My property is not what it was supposed to be either, i.e. 60m2 smaller plot and lots of snaggs, two year delay due to arrangement by bank and developer and therefore £10,000 interest being added on. Apparently bank manager signed off work to say it was ok. We have stopped paying into mortgage at the moment.

My questions relating to this are; Do I have to deal with both the Alpha Bank in Cyprus and the UK Company or can I deal solely with the bank? I have read about incorrectly appointed power of attorney, how can I check if this applies to me and would this be a possible solution to my problems? What advice can you give me on my next steps? I am and always have been willing to have the property repossessed and thought that was what was going to happen at no other cost to me than the loss of my deposit. Is this still a possibility? < Can you help?.

Other problems are starting to surface, in particular when an owner has rented their property to help pay the mortgage and then find that the tennant cant or will not pay the rent. Below is a typical enquiry we are seeing:

I have a villa in Pyla that has a tenant in on 12 month contract placed by ERA in Larnaca The tenant has failed to pay the rent for September has only paid a pertion of agreed 500 euros for October and has not as yet paid anything for November. The ERA Agency has closed down in Larnaca and the Ayia Napa branch wants nothing to do with this problem saying i must work through the courts. As i reside in UK and have a health problem travelling to Cyprus is not an option for me at this time ,my mortgage is getting in arrears due to rent not being paid. Am not sure what i can do?

Dear Sir/Madam, I am currently in lengthy discussions with The Alpha Bank with regard to the Swiss Franc Mortgage who granted a mortgage on a property bought off plan in 2007. The mortgage came onto effect in 2009 and due to the effects of the Euro, I couldn't afford to meet the requirements. I told the bank this before the first payment was due and they only explained that I was legally obliged to make payments. After some discussion the bank decided that they would allow me to return the property with no demands made by myself, and subsequently losing the deposit I had made on the property. This discussion ended 29th December 2010 when I presumed the repossession was being processed. I have since received a letter stating my mortgage arrears to be CHF 6.894.22. In addition a UK based debt recovery company has issued a letter stating they are acting on behalf of Alphabank and I owe £5,576.11. I have spoken to the bank today (28th November) who now have my case on hold.

Do you need help with your alphabank swiss franc mortgage? Contact a Cyprus Solicitor and aska questions for free abuot what can be done.