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'my Cyprus Mortgage Repayments Went Up By 166Pc'

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http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10516732/My-Cyprus-mortgage-repayments-went-up-by-166pc.html

Thousands of British investors who were mis-sold property in Cyprus have until December 31 to file a legal claim against lenders and developers – or face devastating losses.

As many as 15,000 Britons bought property in Cyprus between 2003 and 2009. Many bought “off-plan”, meaning building work was still unfinished or hadn’t even begun.

Most of those affected are buy-to-let investors who planned to offer the property to holidaymakers. Some were expats who moved to the island to work or for retirement.

A large number now face financial ruin due to huge currency fluctuations, which caused mortgage repayments to double or triple in size, and plunging house prices.

Banks and developers advised buyers to take out Swiss franc mortgages because the currency was considered stable and the interest rates were comparably low. However, it soared 40pc against the euro in the aftermath of the financial crisis and some banks hiked mortgage rates.

At the same time, Cypriot property values plummeted by 70pc in some areas, trapping investors in negative equity. UK buyers are estimated to have €1.6bn (£.1.3bn) of debt outstanding to Cypriot banks.

Many investors argue their mortgages were mis-sold because they were not alerted to the currency risk by banks. Others said Cypriot solicitors used invalid powers of attorney to commit them to loans with terms different to those marketed.

The wonders of property investment.

People not doing their homework and making easy business decisions because what could go wrong all encouraged by the helpful bankers seeing that year end bonus. O look a another sucker to sell too. However buyer beware if your prepared to make this type of investment you should be doing your homework and looking at the risks not just relying on the slimey salesman who's going to tell you soothing words to sign on that dotted line.

Still at least property only goes up in value.

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Thousands of British investors who were mis-sold property in Cyprus have until December 31 to file a legal claim against lenders and developers – or face devastating losses.

Don't they have to prove they were mis-sold.

Not that I understand anything any more. People who have homes which have hyperinflated in value, going on to buy 1 or more offplan properties abroad, entirely innocent, and always salespeople and lenders to blame. Completely different world to my own, outbid by mega egos for a small UK home, during all the massive HPI years.

Mr Wilkinson said: “The state pension in Britain is rubbish in my opinion, and I decided to invest in property in Cyprus for retirement. If someone had told me of this type of risk there’s no way we would have bought the property.”

:lol:

Another Cyprus investor victim here.. from October 2013 for those who missed it first time around. http://www.housepricecrash.co.uk/forum/index.php?showtopic=194144

“I feel I have been mis-sold from the very beginning, first by developers promising the Earth and not delivering and now by the banks. They want a total of £400,000 from me and I have decided not to pay them any more and institute my own proceedings in the Cypriot courts.”

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The only thing that surprises me is there isn't more of these stories in the press. I was watching 'home here or in the 3rd world' (or something like that) and they talk of 30%. 40%, etc price falls from peak in places like Spain and now is a good time to invest etc etc.

But what about all the people who bought at peak, where are their stories? Given people like to complain like mad about being mis-sold anything and everything they're being very quite.

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The only thing that surprises me is there isn't more of these stories in the press. I was watching 'home here or in the 3rd world' (or something like that) and they talk of 30%. 40%, etc price falls from peak in places like Spain and now is a good time to invest etc etc.

But what about all the people who bought at peak, where are their stories? Given people like to complain like mad about being mis-sold anything and everything they're being very quite.

The sheeple cant be told that house prices can go down, regardless of what country, property is a no loose bet

all of the big crashes have not been reported in the mainstream TBH, if i wasnt on here i doubt that i would have

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The only thing that surprises me is there isn't more of these stories in the press. I was watching 'home here or in the 3rd world' (or something like that) and they talk of 30%. 40%, etc price falls from peak in places like Spain and now is a good time to invest etc etc.

But what about all the people who bought at peak, where are their stories? Given people like to complain like mad about being mis-sold anything and everything they're being very quite.

Thanks to Gordons fine stewardship of the British economy, the pound probably fell 30 or 40% against the euro, meaning in sterling terms they lost nothing, so as long as they didnt take out a swiss loan, I guess.

Doesnt surprise me there arent more of these particular stories. You've got to be pretty 'special' to be a Brit wanting to buy a house with euros in Cyprus secured with a swiss franc mortgage. Most people would rightfully be scared and run a mile.

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The only thing that surprises me is there isn't more of these stories in the press. I was watching 'home here or in the 3rd world' (or something like that) and they talk of 30%. 40%, etc price falls from peak in places like Spain and now is a good time to invest etc etc.

But what about all the people who bought at peak, where are their stories? Given people like to complain like mad about being mis-sold anything and everything they're being very quite.

British snobbery - you tell everyone what a genius you are when your HP increases but you keep it pkssible fof aslong as you can when the price goes down. I suspect for every one who tells their story of loss to the papers that there are thousands more keeping silent.

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In fairness I think they were miss sold the mortgage.

House prices falling well that's their own fault. But the average punter takes out a loan in their own currency.

They must have trusted the advise of some one selling them the mortgage in Swiss franks I can't believe that loads of people came up with the idea independently.

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Don't agree. House prices are pretty much the sole responsibility of the monetary authorities. They decide who wins thru' their policies.

Have you ever considered taking out a loan in a foreign currency?

That is quite a fasciculated thing to do I just find it hard to believe the average punter came up with the idea independently. Must of been hard sell surely.

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Whose jurisdiction would it be under.

Switzerland? Cyprus?

I'd run a mile personally, I can't see where the regulatory oversight would be...

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In fairness I think they were miss sold the mortgage.

House prices falling well that's their own fault. But the average punter takes out a loan in their own currency.

They must have trusted the advise of some one selling them the mortgage in Swiss franks I can't believe that loads of people came up with the idea independently.

Maybe but greed probably played a part in the swiss franc mortgage thing. Id imagine it was well talked about amongst the ex-pat comunity on the island, given that the island is known as a tax haven / foreign money haven. They were all get rich quick savvy investors untill they were missold ;-/

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And earlier still! - from 2011 :)

http://www.housepric...howtopic=166158

There has been a judgment (November 2013) which might come as a big relief to 'victims'. http://www.judicaregroup.com/news/130-cyprus-judgement

Found out about it after this set-to by a Cypriot legal person (barrister) and someone from a UK legal services company involved in the claim, again in November 2013. http://www.propertytribes.com/problems-with-cyprus-mortgages-power-of-attorneys-properties-t-9469.html

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I can't raise much sympathy for those who have conducted leveraged currency speculation by borrowing in a currency they do not receive as income. This applies doubly to those doing it in a foreign country.

It's worth noting, there are massive problems with foreign currency mortgages spread across central europe. Hungary is a complete basket case.

Mindful Money: What happened to all those Swiss Franc mortgages in Hungary,Cyprus,Croatia and Poland?

According to the Magyar National Bank of 5.4 trillion Forints of mortgages in Hungary some 3.5 trillion Forints worth are in foreign currencies (or 1.8 million mortgages out of 3.3 million) with the majority being in Swiss Francs. Of course the rise in the Swiss Franc made a bad problem worse in terms of size.
Also whilst the MNB has cut rates take a look at what the consumer is still paying!

The APR on actual transactions fell to 9.3 per cent in the case of housing loans, and to 11.5 per cent in the case of home equity loans

Poland

Yes here too! At the start of the credit crunch around 70% of all mortgages in Poland were in foreign currencies and this has improved but is still high at 54%. Also the Polish central bank (NBP) has pointed out this.

High Loan-to–Value ratio loans, with Swiss franc-denominated loans prevailing, have a big share in banks’ loan portfolios.At the end of 2012, the share of housing loans with LtV ratios exceeding 100% and 80% could be estimated at slightly over a 1/4 and half the portfolio respectively.

The worrying part is that in spite of promises of “unlimited intervention” at 1.20 to the Euro it currently sits rather near to that at 1.22. If we recall that the Euro too is strong we see that it appears that there is still an appetite for Swiss Francs and that this saga may well not be finished.

FT link with more

Story from 2010

What tips the European banking system over the edge may in the first instance be Central and Eastern Europe, rather than the PIIGS. Reckless lending there by Austrian, Swiss, German, and Swedish banks in euros and Swiss francs, has left foreign exchange debt at horrific levels in Hungary (mostly CHF loans) and Bulgaria (Euro loans). And Romania (Euros), Poland (CHF), and the Baltics also have substantial foreign debt exposures.

As the Swiss franc surges to record levels against the forint on safe haven flows, the consequences of being burdened by debt denominated in the one of the world’s two strongest currencies are becoming clear. And a tsunami of bad debt now threatens to engulf Europe’s banks.

Because Swiss franc loans make up about 44% of Hungary’s entire household debt stock and 55% of all mortgages the ECB and the IMF have had to put in place support mechanisms, but Hungary stands out in terms of its vulnerability to any future growth shock or lack of foreign funding because its foreign debt to GDP ratio is already 136%.

Interestingly, the Swiss themselves weren’t foolish enough to do any of this lending. Austrian banks provided about 40% of CHF loans in the euro-zone. And between 15-25% of the balance sheets of the top four Greek banks are exposed to SE Europe, including almost 40% and 30% of loans to the private sector in Bulgaria and Romania respectively, according to Macquarie Bank. In turn, German, French and other northern European banks are heavily exposed to Greece. No wonder then, that the EU fears the chain reaction which would ensue from a Greek default.

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