A number of Christofi Law Clients have received letters from Alpha Bank, headed “without prejudice”, offering to restructure their loans. The bank writes that it does so because of the “global crisis” and the proposal is intended to assist its customers either to continue to pay off their existing obligations or to allow them to “fully settle the loan” through what the bank describes as “ a work out loan in Euro or Sterling”. The letter goes on to outline that they are prepared to discount “a significant amount” for full and final settlement.
The letter requires a response by 18 October mentioning that new agreements will have to be entered into, which they describe as “formalities” ( presumably a waiver of any existing claims). It is not clear what the significance of the deadline is, but the deadline is very close to the limitation period for issuing proceedings coming to an end for most missold mortgages in Cyprus (December 2013 ). The reference so close to limitation raises the issue of whether the letters are intended to lull people into missing the issue deadlines.
Of course it is also possible that Alpha Bank are on the back foot and have realised that a substantial percentage of its loan portfolio may be declared unenforceable given the number of challenges that have been raised.
Christofi Law have encouraged one client to write back and see what the bank has on offer and will report in more detail in due course. If the bank proposal is genuine, those who have signed up with representatives who offer a proposal based on a percentage of loan saved might sensibly want to bypass their representative to go direct to the bank and see what the bank has to offer. In which case people are reminded to head up their letters with a protective “without prejudice”.
TEXT OF LETTER SENT TO CHRISTOFI LAW CLIENTS
“ Dear Customer
Loan granted by Alpha Bank Cyprus Ltd (HE923) of Chilonos & Gladstonos Corner, Stylianos Lenas Square, 1101, Nicosia to XXX with loan account number commencing with the numbers XX and ending with the numbers XXX for the initial amount of CHF XXX-(the ‘Loan’).
The Bank, acknowledging the global economic crisis and its consequences on individual households, has decided as a gesture of good will and in order to facilitate you in meeting your repayment obligations to the Bank, to offer to you, for a limited period of time, a scheme that will assist you to either:
(a) continue repaying your obligations to the Bank, or
(b) allow you to fully settle the Loan.
The options available under the scheme are briefly outlined below:
1. Discounting of a significant amount on the current outstanding balance of the Loan and re-financing of the Loan through a new work-out loan in Euro or Pound Sterling to be granted to you by the Bank.
2. Discounting of a significant amount on the current outstanding balance of the Loan for full and final settlement of the Loan, through your own means.
We are available for further details regarding the above. We firmly believe that with the Bank’s support and your co-operation, your selection of either option, will, upon the completion of the formalities required by the Bank, assist you in either fully and finally settling your obligations to the Bank under the Loan or in rearranging your obligations to the Bank under the Loan, with the added benefit of a substantial discount to the sums due by you under the Loan.
To take advantage of this scheme and for further assistance in this matter please contact Mr Christos Koumas at Larnaca Foreign Citizens Housing Loans Department, contact number tel:00357-24824419 , e-mail address: Housing.Foreign.Larnaca@alphabank.com.cy, by 18th October 2013 at the latest.
This letter is sent to you without prejudice and in full reservation of the rights of the Bank. It is further clarified that any arrangement in the above context will be subject to the final approval of the Bank and to the execution of any new and/or additional and/or supplemental documents which the Bank considers necessary. “