Home Repossessions in Spain: A Legal Perspective

[Unregistered]

Thank You for your response, the point of my wife staying there is as we are currently seperated and she needs somewhere to live, I myself am moving back tot he UK but she has decided to stay here so that was the reason, to know if she would be able to stay in the property with a tennants agreement until she managed to sort something else out.

[Lawbird Lawyer]

If your lender is repossessing you I wouldn't advice you signing a rent over to your wife.

Yours faithfully,

[sunnylondon]

I am currently three months in arrears with caja madrid and whilst talking to them over the last few weeks to try and get me on an interest only mortgage i have recived a respossion order that was started sometime ago, 8 th April. I have called the local branch again today that i was trying to sort out the mortage and i would like to resolve this before it goes to reposseion as i am moving to spain for good. She advsied me that once the reposseion order has started there is nothing she can do. I have range again and she was very aggressive telling me she had no time to talk to me and would relay the message that i can pay all arrears today to end this matter and we can discuss putting me on interest only later. I am very concerend that i will lose the property as it is not in negative equity. What action should i now take.

[Lawbird Lawyer]

Dear Sir or Madam,

You can at anytime before the judge rules on the matter stall the repossession procedure paying all the moneis owed lump sum.

This is discussed in more detail here.-

http://belegal.com/forums/showthread.php?t=73&page=5#50

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

[DannyBoy]

Hi thanks for the advice the problem is I don't know what the bank are doing the local branch where we took out the mortgage has closed and when I email or call the main bank no one can tell me what is happening and struggle to find any information about me or my mortgage account. I have recently requested a new Nota Simple and it does show the mortgage on there aswell as a Embargo from Social Security but it doesn't seem to mention anything about the mortgage arrears or repossession. Is there a way to find out?

Thanks

[Lawbird Lawyer]

It would have to be trough the bank I'm afraid.

Repossessions are taking now more than three years on average due to the sheer volume. I wouldn't be surprised they take 4 years or more in the future as a result of the law courts being clogged.

Yours faithfully,

[unknown]

HI danny boy i am in the same position as yourself.
hopefully a little advice here for me. we have a mortgage with Deutsch bank costa blanca our branch manager was very helpful setting up the mortgage. I went to the bank month after month to pay the mortgage none of the staff could find the details of which i gave them. I gave them all our details all the staff could find was three bank accounts (we did not open these the manager did by mistake and told us she would close then this did not happen)
Eventually the bank manager who set the mortgage up located the account and took the payment.
We had very little information on the mortgage account from the bank. Due to difficulties and lack of paperwork (we only had copy of the escitura) we were a little worried as to why no one could find the mortgage etc. we were asked by staff if we were sure that we had a mortgage with them (our branch then closed)
i visited another branch re repayment help through our insurance payment protection plan as my husband was made redundant. we were notified by the same bank manager that the insurance was due to be repaid as it was paid quarterly (i thought we paid in full) she wanted another 290(ish) euros for three mths but then told me this was for death only and for my husband only who was 31 and in great health again alarm bells ringing why was this so much, so as our situation was a little messy with my husband being made redundant and not having spare money we could not pay this nor could we pay the mortgage, i requested a break for a couple of months until we found further employment, the manager did not want to know she said no (very direct.)
then i asked if we could reduce the payments again no.
I walked away very distressed and not knowing what to do. I contacted the bank numerous times unable to pay the mortgage and no one could help as they could not locate the details I was even asked if i had a mortgage with them again. we departed to the k in search for work last year, before we departed we visited the branch and spoke again explaining we were going to return to the uk and asked about the bank taking the keys the manager again very directly said no we do not take houses back. I asked what would happen next she simply said nothing and shrugged her shoulders. I explained i would be in touch. When settled in the uk we contacted the branch to find the manager was no longer there and again no one not even the new director of the bank could find our mortgage details. The new director took our details and was quite concerned that we had no documents or had not heard anything regarding the non payments. She took our email address and phone number and explained she would be in touch the following day. the call never came so i contacted her again, she was going to contact me the following week. We have heard nothing until a couple of days ago when i had a call from a lady in the bank who asked if we wanted to sell the property. i said yes but then realised that the value of the property will not meet the mortgage etc nor do i have proof of the mortgage or legality of the sale. I am now in possession of a document in spanish for me and my husband to sign and send to the bank. If we let the bank sell the house what happens to the outstanding loan, I am looking to have a solicitor look at the document and give us advice of where to go next.

[Lawbird Lawyer]

Dear Sir or Madam,

If you sell the property and there's still an outstanding mortgage loan you will be held personally liable for it even against your UK assets.

Please read the following thread on someone who already went through this:


Can we be chased by the bank after arranging a Dacion en Pago?

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

[Karen]

Hi there,
Hope you can help us...We are struggling to pay our mortgage,although we are up to date. The house has equity in it and we want to follow the dacion en pago route. The bank have said the have stopped doing dacion de pago 6 months ago and refused. they will not come to value the house and are not interested at all. Instead they told us that we would be black listed if we stopped paying our mortgage. Can the notary make them follow the procedure,and the provision set by the spanish cival code?. Surely if we give back our house and all the taxes are paid,they can cancel the debt and we can all move on!. What do we do if they refuse?....we fit all the criteria but they aren't budging.......PLEASE HELP

[Lawbird Lawyer]

Dear Karen,

Following my article on the Dación en Pago de Deuda, I wrote that it's not a borrower's God-given right to demand from its lender to accept a dación en pago. The lender will decide on whether they accept it or not; you cannot force them other than trying to do it through a law court which will take long (years) and will be expensive and you'll probably lose it unless you have a good case. I really do not recommend following this litigation path.

What borrowers seldom realize is that a bank on accepting a dación en pago incurs in a great deal of expenses which come out of their pocket; it’s as if they were buying away the property from you:

1. 7% Transfer tax
2. Notary fees
3. Land Registry fees
4. GestorÃ*a fees
5. Maintenance and upkeep of the property
6. Payment of local taxes
7. Payment of Community fees
8. Mortgage arrears.
9. Outstanding utility bills.
10. Percentage to be deposited before the Bank of Spain after one year. (*)

So basically banks run through the numbers to see if it’s worthwhile for them –or not– to accept a dación en pago.

(*) If after one year the property is still on their books they will have to allocate before the Bank of Spain an amount of money as a provision of funds to offset a "potential" depreciation of real estate assets. In 2008 this amount was 10%, in 2009 it was raised to 20% and in January 2010 it has been raised yet again to 30%. What this means is that the BoS believes property prices will be falling. Surprise, surprise.

As explained in my article "Advice to Struggling Mortgage Borrowers in Spain", the Bank of Spain has passed on new regulation early on this year whereby banks are now obliged to deposit 30% of the appraisal value for auction purposes of the property. And this, to add insult to injury, comes at a time when credit-rating agencies are taking pot shots at Spain's sovereign credit-rating on a weekly basis (CDS's soaring day-to-day) and Spanish bank's stocks are derailing in the wake of Greece's financial meltdown as investors fear we're toast. So, banks are hoarding as much cash as possible to raise their core capital and the last thing they want right now is to shove more funds into money-losing enterprises such as daciones en pago de deuda. You do not need a crystal ball to know where property prices will be heading next in Spain.

What I concluded in my article was that if lenders were already reluctant to accept a dación en pago back in 2008 and 2009, following this new change in the law, they were going to be even more so in 2010. I also wrote that I foresaw that the collateral victims of this new stringent regulation were likely going to be all the struggling borrowers, such as yourself Karen, who were keen on following a dación en pago (to waive a repo procedure) as banks were going to increasingly turn them down.

So the logical conclusion of all the above is that instead of needing at least 20% equity (as my outdated article on the dación en pago highlighted in 2008) now in 2010 following the changes in law, I would say that a borrower needs at least 30-40% positive equity for a bank to accept a dación en pago in 2010 unless the property is regarded as prime (i.e. beachfront duplex) in which case the bank will be able to offload it to some savvy investor within the year. In this last case it would suffice to have 15-20% positive equity.

What this translates to into practical terms is that a property then must have been purchased at least prior to say 2004 to still have 30-40% positive equity in 2010 IMHO.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt