View Full Version : IS MY MORTGAGE LEGAL sign with no financial working income

01-20-2010, 06:56 AM

Hi there,
I hope you could help me with some advise in to a financial matter.
In August 2007 I have taken out a hipoteca with caixa galicia building society in the city of la coruna, for 70.000 euros, my question is neither me or my partner were working at the time and had no form of income at all, the manager was till happy to sign us on, even without any form of income and only being living in Spain for 3 month also we didn't know anything about how Spanish banks work, my question is? Is this loan valid because to be honest neither me or my partner could at the time speak Spanish that well and in the notario things just got faster and faster even that we had a translator what could not translate many words,, and the person reading it and the bank manager just say that is all the normal formalities, all we know is we have a fixed mortgage for 5.75% for 20 years and forever straggled to pay the loan.
I would appreciate very much our opinion on this matter,, as many friends think this mortgage is not legal, because we had no form of financial support rather than your savings of 13.000 pounds and your house.
your truly, Sarah

Lawbird Lawyer
01-20-2010, 12:02 PM
Dear Madam,

Loans have been granted with EVEN self-certified mortgages as the only "evidence" of income in the past. I do not see why your loan is illegal.

The problem is a bank's and it's shareholders if they want to lend money around recklessly. Although in practice it's taxpayers who pay the bill ultimately. It is reknown that some lenders were always more peskier on granting mortgage loans than others in which as long as you had a pulse they would give you a mortgage. And that is why all these mortgage-laden problems are coming back to haunt us.

A mortgage is a binding contract between consenting adults; if you are unsure of the terms and conditions it's simple, don't sign it. Excuses like "sinor me no comprende" are not acceptable. It's your money and your whole life that's at stake on signing it. These issues are much too serious too take them lightly as they will effectively condition the rest of your life.

You may want to read this article:

10 Common Abusive Clauses in Spanish Mortgage Loans (http://www.marbella-lawyers.com/articles/showArticle/10-common-abusive-clauses-in-spanish-mortgage-loans) - 4th June 2009

Yours faithfully,

01-21-2010, 04:52 AM
Dear Sir,

Thank you for your promptly reply , but my question remains are this mortgage or hipotecas legal??? you seam to pass on your judgment with out really answering my question.
Can a bank issue loans without looking in to the person power of financial self support, I am not a financial professional but surely in the financial law are terms and conditions and requirement what one needs to comply in order to obtain a loan or mortgage ( work contract, play slips, tax declaration and so on) any of this were not requested from me at any time.
saying this i don't deny my responsibility on the issue, and know like any other individual there are responsibilities.
But in England many loans and credits became illegal through the holes in the financial law exactly because of the same issue. Banks and credit companies issuing all types of loans and credit to people just like me and thousands more and now this debt was been written of by the bank of England due to the errors committed. I have to agreed with you on the matter of shareholder and greedy bank managers wanting big bonuses for new mortgages and insurance sales bonus,, with respect no one had a pointed gun to there heads and making them giving the mortgage or loan and was professionals they are as much to blame as any other scam money making. But the people have the last word as many banks have crumbling down many more will follow....
As a free citizen and the power of free speech I was just a one in the millions of people robed of my finance freedom by this greed and selfish sharks hope the government nails the 50% tax in all bonuses for bank manager and all the Mafia involved in it.

regards, Sarah

Lawbird Lawyer
01-21-2010, 10:24 AM
Dear Sarah,

Your loan is legal, yes. Banks have freedom to give or deny a loan.

I honestly believe I had made it clear in my first line in my reply to you.

As I wrote, mortgage loans have been granted in the past on the basis of self-certified mortgages, meaning there was no evidence whatsoever of the income of the borrower, such as in your case.

It all fell down to the assets he held and his word on what he earned annually. These type of loans are no longer accepted in Spain post credit crunch. The catch was that lenders applied much higher opening commissions and interest rates to these type of loans as they were deemed to be far more risky. Maybe that's exactly why you are now paying a hefty 5,75% interest rate for the privilege of a mortgage loan.

It's the bank's problem (and yours for agreeing to such harsh terms) if they lend money recklessly. But ultimately it will be all of us taxpayers who will pay for these blunders.

Another matter is what responsible lenders ask for normally to issue a binding offer (P60, last 6 payslips etc.). That falls to them, you are mistaken to theing every lender requests the same docuements or they follow the same lending criteria. A mortage loan is not illegal because they've failed to request your P60. Each bank had different risk tolerance thresholds and that's why many savings banks have run into financial trouble and are busy scrambling to merge with other savings banks.

Yours faithfully,
Raymundo Larraín Nesbitt

04-08-2010, 04:32 PM
HI Sarah

It may sound strange being able to take out a mortgage without having to produce proof of income - but this was a common practice around the times you are talking. We had similar "Self certificate mortgages" in the UK where you don't require borrowers to produce their monthly income payslips.

These mortgages existed, simply because millions of people cannot produce proof of income - they because are self employed, they have two jobs, they rely on bonuses or they work off commission. This doesn't mean they on't earn enough money to get a mortgage, they just can't show definite evidence - but self certificate mortgages were very common products in those days to help people who didn't want to show income.

So its very likely that your mortgage is legal. But now such mortgages have been stooped by many banks and that's why maybe friends are saying yours was not legal, which is simply untrue


07-25-2011, 11:55 PM
Hi Sarah

I agree with the previous posts, a friend went through the same experience and it was explained to her through mortgage advisors exactly what has been previosuly mentioned. So no need to worry, if you need more advice you should search online for mortgage advisors and tell them about your situation.