mortgages in north cyprus

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
30/11/2008 20:55

A few years ago banks gave mortgages to builders even though some of the properties were sold and occupied.



I believe the Ko-Op (Co-Op) bank did this.

Which other banks did?

come_on_aylin


Joined: 14/06/2008
Posts: 908

Message Posted:
30/11/2008 21:33

The mortgages on some friends' property are with Universal. Makes you wonder how safe these banks will be if they lend money under such circumstances, will they ever see it again?

Navek



Joined: 01/06/2008
Posts: 2656

Message Posted:
30/11/2008 21:44

Why should any bank want to give mortgages

on un/occupied properties.

To builders who they should know could be strapped for cash.

And the housing market on the Island the way it has been recently.

And can only get worse.

If the builder goes bust, who loses?

The housholder!

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
30/11/2008 21:51

The question is, was it common for banks to give a mortgage when the land had been built on, or was it done by only a few minor banks?

So we have CoOp and Universal. Any others?

Navek



Joined: 01/06/2008
Posts: 2656

Message Posted:
30/11/2008 22:02

rwilson,



Good question, find out where not to put your savings!



I do not know what banks have/did give out mortgages,

could be some, could be all!



Problems will start when banks need their money back from the builders.

Have heard that a bank is giving 23%,

that's some return under the circumstances.

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
01/12/2008 12:32

AK Finance the director of which just happens to be a mate of our landowner who has not paid a single penny back since the mortgage was taken out 3 years ago (after all the houses had been sold I might add). Original value of loan was 100,000ytl, current outstanding amount is 320,000ytl.



Oh and I don't think they are mates any more!!

cocos


Joined: 04/04/2008
Posts: 129

Message Posted:
01/12/2008 12:36

Everyone who has a property with an existing mortgage needs to be worried. If the landowner doesnt pay it back then the land will be auctioned to pay the mortgage its as simple as that. The banks should be ashamed of themselves for granting mortgages on land subject to contracts of sale. How did they think these people were going to pay it back at the high rates of interest here? Fraud and theft on a massive scale and no one wants to help the buyers who now find themselves in this dire situation.



It would be very interesting to find out which banks granted these mortgages and boycott them.

Groucho



Joined: 26/04/2008
Posts: 7993

Message Posted:
01/12/2008 12:47

I still maintain that...



If the registered owner of land (kocan holder) or a developer on behalf of or in agreement with the owner of the land (kocan holder) has, contracted to and accepted payment for, a plot of land and included in that contract is the requirement to parcelise and distribute deeds (kocans) to the new "owner/s"... and then the kocan holder and or the developer with the permission of the kocan holder, subsequently raises a mortgage on said land without informing the bank as to the true nature of the future ownership and rights to a kocan of the other party to the contract, then the mortgagee has perpetrated a fraud upon the bank and should face criminal charges...



It is fraud not to have declared that the land you are trying to mortgage has laready been sold and payment accepted from a third party....



In anybody's language it is against natural justice... to use as collateral something to which you do not have the right of disposal.

Groucho



Joined: 26/04/2008
Posts: 7993

Message Posted:
01/12/2008 12:48

Right now I'm off to sell London Bridge again... ;¬)

stevemac


Joined: 21/07/2008
Posts: 99

Message Posted:
01/12/2008 13:10

Groucho and cocos - very true. It is fraud, deception, theft on a huge scale and it is a scam that the lawyers and estate agents are in on.

PtePike



Joined: 20/05/2008
Posts: 2334

Message Posted:
01/12/2008 13:43

I agree with Groucho. However this is the TRNC and human rights and natural justice don't come into it. The money has been made from the expats and the boom has turned to bust. Turkey isn't interested in paying for a Serious Fraud Squad in north Cyprus so I would say the (Turkish) developers will get off scot free and the (foreign) expats will pay the price.

the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
01/12/2008 14:14

Hi All,



Supposing a developer has two plots of land on two separate title deeds and only half of these two plots of land are built on. Developer is strapped for cash and approached bank and asks for mortgage on undeveloped land. Bank says no because we cannot split a title deed and therefore you will need to mortgage the whole plots. Who is at fault the developer or the bank. The bank being Limmasol Turk Bank?



The Butler

BigBen


Joined: 30/11/2008
Posts: 150

Message Posted:
01/12/2008 14:43

In General:

Neither banks should lent nor the developers should borrow on land that is been develop.

The land or at least part of it belongs to the purchasers and developers should not use clints property for security to borrow.



In particular:

Garanti Bank : Is lending upto 70% for upto 20 years at tru rate interest, for any pre 1974 land or property or new build on pre 1974 turkish owned land.

I did not ask, but I am sure all other TC banks will lent on the same principles.



WB Finance : Will lent upto 50% for max 10 years , including off plan. Interest rates are 9.5% for off plan property and 8.5% ready to move in.

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
01/12/2008 14:56

Groucho re msg 8 - do the bank's ask the right questions or do they just turn a blind eye looking forward to the huge amount of interest being charged? What do they think the landowners/developers are raising funds for? In our case, our development was started in April 2004 (when we signed contracts) and all houses were completed and the last one sold around November 2005. The mortgage was raised in September 2005. The bank freely admits that it is standard practice here to raise funds in this way, they just all kept their fingers crossed that (in our case) the landowner's 3rd villa on the site would be sold quickly and the mortgage repaid, hence no repayments being made for 3 years. The villa still has not sold and will not now because of the mortgage (catch 22). Why did the bank allow the landowner not to make any repayments?

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
01/12/2008 14:59

Sorry, the questions posed in my msg 14 were rhetorical and not directed at you personally Groucho!



For info there is an interesting post on TRNC VO board regarding injunctions, memorandums and mortgages http://trncvillaowners.phpbb3now.com/viewtopic.php?f=4&t=5142

cocos


Joined: 04/04/2008
Posts: 129

Message Posted:
01/12/2008 15:49

I bet the banks admit that it's "standard practise" to raise funds by mortgaging land to pay for their developments. Same as the lawyers freely state "it's standard practise" But actually it's gross negligence on the part of the banks, fraud, deceit and theft on behalf of the vendor who sold the properties which stand on the land. It's gross negligence and misrepresentation by the lawyers who knew that land was subject to mortgage and either didn't tell their clients about them or told them it was normal in TRNC! In most peoples contracts it will state that the vendor agrees to hand over the title deeds, now suddenly they say they won't, or can't because they can't pay their taxes, or they took out a mortgage so they can't transfer title. Sorry, but that's fraudulent deceit, false statements and misrepresentation. What's going to happen to all the buyers now in that situation? Unless they can pay off the mortgages - and most buyers have already been bled dry and have no more money left

cocos


Joined: 04/04/2008
Posts: 129

Message Posted:
01/12/2008 15:49

then the banks will call in the mortgage, auction the land and we'll be left with no home and no money!

CJtill


Joined: 02/05/2008
Posts: 836

Message Posted:
01/12/2008 15:57

Dont forget when the land is auctioned the contractual owner(s) will not get a chance to buy, as the date and time of said auction will not be published and only the selected few will have a chance to pick it up for a song.

PtePike



Joined: 20/05/2008
Posts: 2334

Message Posted:
01/12/2008 16:56

Pretty bleak for those in that position, and it sounds as if there are a good few.

Hector


Joined: 26/08/2008
Posts: 2352

Message Posted:
01/12/2008 18:42

I see CreditWestRep admits that Credit West bank have lent in this manner

see

http://www.cyprus44.com/forums/7523.asp

Groucho



Joined: 26/04/2008
Posts: 7993

Message Posted:
01/12/2008 19:42

My point is that the courts should, in the circumstances where the fraud has been committed by the developer/kocan holder in selling to one and mortaging with another without declaring that the property has to all intents and purposes already been sold to others, regard the fraud as one between the mortgagee and and the bank and the new owners prior claim should stand.



It is the banks duty to do what is called due diligence and if they don't and they lend money to someone who is a poor risk then it is they who have made a mistake and it is they who should have to write off the bad debt. They should then take advice as to whether suing the perpetrator of the fraud for his duplicity in the matter is worth it.



The rights of the first buyer of the property should not be a party to this...



The fraudster is the mortgagee and the dupe is the bank.

fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
01/12/2008 19:55

i think the problem as i understand it is that the bank only mortgages the land.

its not interested at what is on it.

a friend of ours went to the bank with his land for a mortgage, they were not bothered what was on it, they just offered a pitance for it.

i think they lend because the person is the name on the kochan.

the legal owner so to speak.

again its the buying system which needs changing.

Groucho



Joined: 26/04/2008
Posts: 7993

Message Posted:
01/12/2008 19:59

But no financial institution should lend money to someone who has no natural right to dispose of the collateral to settle the debt and if they do lend money in this way they are daft as a brush...



But seeing that banks are behind the sub-prime mortgage fiasco that has precipitated this awful world-wide crisis I guess we all know they are....

fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
01/12/2008 20:43

i agree groucho

but the only legal owner is the person named on the kochan.

thats why i am saying the system needs to be changed,

when you pay your money the kochan should instantly go into your name.

that way this could not happen.



as for the uk i blame the greedy banks for their own mess.

they look at your earnings and capital and then give you a mortgage promise to a figure they decide on.

then people borrow up to that limit, never thinking about whether or no they can pay it ,if and when the interest rate changes or when they come to the end of the fixed rate deal.

basically the banks let people borrow up to their max. it was always going to happen.

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
02/12/2008 13:05

So the list of banks we have so far are...

Ko-Op (Co-Op)

Universal

AK Finance



I think we may be on to something here. IF its only a few small banks did this -they are in deep trouble.



What is the legal position, for instance, if it can be shown the bank loaned money after properties on the site were actually finished and occupied. There had to be a survey and therefore proper knowledge.



Any other banks who gave mortgages when development had started, please add them (Creditwest denies doing so).

cocos


Joined: 04/04/2008
Posts: 129

Message Posted:
02/12/2008 16:02

The banks will be in deep trouble but so are the people who;ve got mortgages over their properties. Some banks are charging over 30% interest on mortgages. If the developers dont pay it back we'll be evicted. It;s as simple as that.

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
03/12/2008 23:58

Interesting...



It seems that the banks who loaned money to builders on land that was already built on is ..



Ko-Op (Co-Op)

Universal

AK Finance



Perhaps a representative of these three banks could comment on this?

Perhaps their customers would encourage them to comment?

the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
04/12/2008 09:59

Hi rwilson,



So is the Limmasol Turk Bank the same as the Ko-op Bank or is it different? If it is different, then I think that makes four.



The Butler

kibrissibel


Joined: 18/02/2008
Posts: 562

Message Posted:
04/12/2008 12:40

An emergency property owners meeting by the HBPG is being held on Wednesday the 10th December 2008 at 12 noon in the Pia Bella Hotel, Girne to discuss the predicament surrounding property purchase, including:



non transfer of title deeds

borrowing against properties that you have paid for

exorbitant interest rates being charged for non-payment of loans

risk of eviction due to landowners non-repayment of loans

abandoned incomplete properties/sites

what happens in Court

lawyers negligence

Some buyers will give a brief summary of the pitfalls they have endured and what they are doing to find a solution.



Everyone is welcome to come along and join in, we all need to support each other.



This affects thousands of buyers here so if you want to support

Marian, the HBPG and all purchasers here, please attend.



Sibel

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
04/12/2008 16:37

Have any banks actually called loans in and forced the auction of any occupied sites? If not, it will be interesting to see who is the first to do it and what the reaction will be. Ref my message 6, the bank has taken our builder/landowner to court for non-payment. The builder's solicitor tried to argue that the interest was excessive (the bank said outstanding loan now worth £270,000). Been speaking to my builder today and he says that they went to court this week and the court ruled the builder must pay back £140,000. Substantially less than the bank was demanding but, substantially more than the value of the original loan. We are now waiting to see what happens next.

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
04/12/2008 18:54

Groucho, msg 9



London Bridge was sold to the Americans in 1970'ish, dismantled and rebuilt in Arizona.



Problem was they thought they had bought Tower Bridge and most disappointed with what arrived!!!!!!!!!! LOL

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
04/12/2008 19:34

OK our efforts to determine whish banks loaned money to builders on land that was already built on seem to indicate that the following may be guilty ..



Ko-Op (Co-Op)

Universal

AK Finance

Limmasol Turk bank



Obviously banks do a survey before giving a mortgage. Obviously this would indicate building in progress and imply sales may have been done.



Perhaps a representative of these banks would comment and help us as we try to determine the truth. Perhaps their customers would encourage them to comment?

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
06/12/2008 10:46

Comments please banks - this issue is not going away...

cocos


Joined: 04/04/2008
Posts: 129

Message Posted:
06/12/2008 10:56

The banks are guilty too. Guilty of incompetence, negligence and theft!

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
09/12/2008 00:44

Hi cocos



So far it seems that only 4 banks gave a mortgage when there were actual buildings on the site.



Ko-Op (Co-Op)

Universal

AK Finance

Limmasol Turk bank



If it can be shown they had reasonble notice of previous sales (eg finished houses with people moved in) they would not be able to enforce their mortgage in any court. Its called constructive notice and its the law.

Cyprusquest


Joined: 09/12/2008
Posts: 428

Message Posted:
09/12/2008 07:37

Msg 35 Does the constructive notice apply in the TRNC?

the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
09/12/2008 20:21

Hi All,



You will find that nothing applies in the TRNC, they seem to be able to get away with anything. If this had happened in the UK all these developers would be serving time for fraud.



The Butler

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
12/12/2008 22:24

There is no reason why constructive notice cannot apply in TRNC.



Imagine a bank can be shown to have commission a survey, and imagine that survey indicated that houses were sold since people were moving in, then it would have received constructive notice.



To a leeser extent, half finished houses could use the saem argument (only with a weaker argument)

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
13/12/2008

If anyone has accounts with any of the above the must close them immediatly and tell the management why.

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
13/12/2008 08:33

There is an easy solution to this issue, we think it is easy anyway.



As soon as contracts are stamped and registered a record is made at the Tapu the building is to take place on plot ABC124.



When someone applies for a mortgage, the bank checks at the Tapu. If there is a contract to build then mortgage is refused.



If a mortgage is subsequently given by a bank the bank then become liable for all costs.



Easy to set up, easy to police, impossible for the authorities to implement for obvious reasons!!!!!





Come on we got to start making a lot of noise over these issues.

stevemac


Joined: 21/07/2008
Posts: 99

Message Posted:
13/12/2008 10:57

Absolutely right! All the selfish people who think the HBPG should do all the work for you need to get off their arses and support them and everyone.

Speedypaul


Joined: 28/03/2008
Posts: 65

Message Posted:
13/12/2008 14:22

This is still going on and being allowed to go on by the banks and the advocates. I got a copy of the title deed for my site recently which clearly show the builder transfering shares to his family and taking out a morgage after contracts of sale where made and of course monies paid. The solution is not a clear one. Do nowt and run the risk of deportation/poperty removed via banks, take litigation and play the pump money into the advocates for the next few years game (with a very uncertain outcome) or appeal to higher forces. If anyone has managed to come out the other side with a builder whos unwilling to co-operate I would love to know the solution.

the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
13/12/2008 14:56

Hi All,



Although our advocate wrote to our developer pointing out that they had breached the contract they had signed, when they took out a mortgage on our properties. We were told that to take them to court would be too costly and would take forever. The response we got back from our developer was, "Take us to court and you will never get your title deeds". Although there is a very large mortgage on our properties, I do think the developers are paying it off every month. We can only hope that they will carry on doing this and that eventually we will be in the clear. In the meantime owners are having the stress and worry that they may lose their homes that they have paid for.

We shouldn't have to have this at our time of life and there should be a law to stop this happening. So We are behind any move to do anything that can be done to protect buyers.



The Butler

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
13/12/2008 16:17

Speedypaul, The Butler.



Have your banks been quoted above if not would you please post the name. If you would rather remain anonymous please e-mail my and I will ensure somebody posts the names.



What do others think. After the week end create a new thread naming those known banks involved in this mortgage scam to warn people and to hopefully withdraw all funds from them.

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
13/12/2008 17:33

Four banks are alleged to have acted immorally by giving a mortage to a builder knowing buildings on the land were already sold. Co-op gave a mortgage to a builder knowing people had actually moved into their properties!!!!



Ko-Op (Co-Op)

Universal

AK Finance

Limmasol Turk bank



People who are their customers should ask them to explain their position, as CreditWest did recently to their great credit.



Personally I moved my account to CreditWest because they responded and explained they did not issue any of these toxic mortgages.

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
13/12/2008 19:10

I don't necessarily disbelieve Creditwest but think what it would do for their business if they publicly stated in writing that they do not advance funds to developers/land owners on land that is subject to development/contracts of sale. Nice thought but I very much doubt they would because I very much doubt that it is an actual policy.

Hector


Joined: 26/08/2008
Posts: 2352

Message Posted:
13/12/2008 19:22

This question re have they issued mortgages on development land has been put to a 'representative' of creditwest before. See Messages 31 onwards on

http://www.cyprus44.com/forums/7523.asp

The issue was not totally clarified as reply was initially 'all banks have...' and later that they don't have such cases. Not convinced I'm afraid.

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
14/12/2008 14:10

I believe that if CreditWest had given such dodgy mortgages out, some homeowners would by now have stepped up to accuse them.



I think they have made it clear and I accept the are blameless. If someone knows differently, they by all means let us all know.



We need some good guys so we can prove not all banks felt this was reasonable commercial business.



Everyone, TRNC citizens and foreigners alike need to support banks who have not enagaged in the illegal, immoral, neglient conduct of issuing toxic mortgages.



Am I right?

WAZ-24-7



Joined: 18/10/2008
Posts: 695

Message Posted:
14/12/2008 14:18

rwilson,

Absolutely,

A written indication of support or indeed withdrawl of support to banks would make any bank think twice before entering into these toxic mortgages.



However it may be that the damage has already been done. The Court listings are full of Mortgage default issues and Contrat of sale breaches.

rwilson


Joined: 14/04/2008
Posts: 87

Message Posted:
15/12/2008 14:50

WAZ-24-7

Are you sure? Is it possible to post these?