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Thread: Spanish bank is claiming on my UK home which is for sale. Will this affect the sale?

  1. #1
    lady
    Guest

    Question Spanish bank is claiming on my UK home which is for sale. Will this affect the sale?

    Spanish bank is going to make a claim on my UK home, it's for sale and i have a buyer, will this affect the sale going through?

  2. #2
    Senior Member
    Join Date
    Oct 2008
    Location
    Marbella
    Posts
    1,095

    Default

    Dear Madam,

    The competent law would that of your home country, England and Wale´s.

    I cannot give an opinion on your matter as it's not ruled under Spanish law.

    Yours faithfully,
    Raymundo Larraín Nesbitt
    Last edited by Lawbird Lawyer; 01-08-2010 at 06:31 PM.

  3. #3
    Lady
    Guest

    Question will Spanish banks withdraw there claim on U.K property if we made them an offer?

    Because we just walked away from our house in Spain we thought they would just take it, but we have received a letter saying they will put a claim against our U.K home, we are in the middle of selling this house to pay off U.K debts, do you think they would consider payments to bring our arrears up to date so we could still sell our U.K home?
    Are Spain negotiating or are they after properties?

  4. #4
    Senior Member
    Join Date
    Oct 2008
    Location
    Marbella
    Posts
    1,095

    Default

    Dear Madam,

    There were a great number of people who denied this being possible. Many are still in the denial stage.

    Regrettably in Spain, on signing a mortgage, you will be held personally and unlimitedly responsible with all your assets both now and in the future if you default.

    What this means is that even if you walk away from your Spanish property the lender can still pursue you abroad for the shortfall.

    I've written many article and blog posts on this matter as well as replying to many similar legal queries. I advice you to read them all.

    Similar threads on the matter:


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

    Will i lose my uk home
    Unregistered

    Property was bargained away and we are being chased for the shortfall. Please help!
    Wendy

    Handing over keys - Mortgage arrears
    Unregistered

    Related queries on mortgage arrears:


    We are in 3 months of mortgage arrears with a Spanish bank for two properties the developer have not completed properly. What are our options?

    What are my options if I have fallen in arrears on my Spanish mortgage?


    Articles and blog posts dealing with mortgage arrears and possible solutions:

    Bank Repossessions in Spain: A Legal Perspective - 25th June 2008

    The Dación en Pago Explained - 28th March 2009

    Cannot Keep Up Repayments on your Spanish Mortgage? Not All is Lost
    Sunday, November 9th, 2008

    I’m not sure if you are aware the Euribor, to which all Spanish mortgages are referred to, has fallen dramatically over the last weeks and will continue to do so as the ECB will be lowering the interest rate which translates into cheaper mortgages.

    In any case the European Central Bank has lowered the interest rates significantly over the last months this ought to help drive down the Euribor rate. Banks will revise the Euribor rate and lower your monthly mortgage repayments.



    Please read the following on Bank Repossessions in Spain:


    1.- My article on:

    Bank Repossessions in Spain

    2.- Other related queries on this topic:


    Sterling Plunge: Not All Doom and Gloom

    Steep Drop in Euribor Translates into Cheaper Mortgages

    What are my options if I have fallen in arrears on my Spanish mortgage?

    We are in 3 months of mortgage arrears with a Spanish bank for two properties the developer have not completed properly. What options do we have?

    What to do if I cannot meet the mortgage repayments?

    Unable to keep up repayments

    Spanish Mortgages: No Tax on Term Extension or Swapping to Interest only - June-26, 2009

    The Dación en Pago Explained (handing over the keys to the lender without repossession)

    Cannot Keep Up Repayments on your Spanish Mortgage? Not All is Lost.

    10 Common Abusive Clauses in Spanish Mortgage Loans – 4th of June 2009



    The property still belongs to you, not to the bank. The debt goes personally against you. Which means that if the property is in negative equity (i.e. if house prices should fall) then the outstanding balance is owed by you. Spanish banks can and are already chasing up the debts in the UK. They may outsource it and hire local UK law firms or else debt collection companies or sell on the non-performing mortgage to specialised companies for a fraction of the nominal value. The latter will chase you. It's true that this is often an expensive process for Spanish banks so they will always be reluctant on doing it. It will of course depend on the amounts owed. Bear in mind the default interest rate is a normally between 24-27% compound interest p.a. (not simple interest!). So the debt will mount indeed very quickly over time.

    Spanish banks are very surprised at this phenomenon and have been caught off-guard because they are used to dealing with Spanish customers who no matter what service their mortgage in time even if the afore means having to feed on bread & butter. Whereas many foreigners are just walking away as if this was the US thinking no further consequences will arise from this.

    The ability of a solicitor to act on your behalf is honestly very limited due to the ongoing credit crunch as banks themselves are finding increasingly hard to secure finance lines. A number of solutions would be:

    1. Negotiating interest-only whilst the property is put up for sale or just to weather off the storm meanwhile. This option is now not feasible as Spanish banks seldom grant interest only and if they do it's really just as a teaser really for one year. Now with this credit crunch they are reluctant to even grant that one year.

    2. You may extend the mortgage repayments to an additional number of years. The drawback is that on doing so the amount of interests you pay on the long run is increased dramatically. So it's only an option for those who are left with no other really. The Government is now allowing this change free of charge to the struggling mortgage borrowers providing they are residents and it’s their permanent dwelling. So you will not pay for Notary or Land Registry fees on doing it.

    3. Dación en pago. This is basically handing over the keys to the lender and signing a deed at the Notary by which the bank commits itself not to chase you for the debt and consider it discharged for good. The catch is that the property must not be in negative equity nor the repossession procedure started against you. This is more difficult than people think because due to the easy credit of the last years the Loan To Value of properties was really high, too high in fact, hence all the bank related problems we are reading with massive down writings. People borrowed far too much and now their properties may have fallen below their loan. If this happens the Lender will be very reluctant to agree to this "dación en pago" (hand back the keys to the Lender) because the collateral has no or few equity left.

    4. If you already have run through the numbers and you are convinced that you will no longer be able to service your mortgage, rather than defaulting and being repossessed, you should very seriously consider selling the property as a distressed asset (many websites offer this service). The catch again is that the property should not be in negative equity. The more it is the least likelihood there will be anyone interested in it as they in turn are regarding the purchase as an investment and the numbers need to stack up to make it worthwhile for them.

    I hope the above helps you, good luck.

    Yours faithfully,
    Raymundo Larraín Nesbitt

  5. #5
    Junior Member
    Join Date
    Jan 2013
    Posts
    1

    Default Dascion en Pago

    Have the rules on Dascion en pago changed? I am president of a Spanish urbanisation where we have many owners who have done DEP with a few different banks, thou predominantly UCI, who think that is it- it is all settled? is this true? The banks as new owners are paying the community fees.

  6. #6

    Default

    Hello Bornfree64,

    I am afraid there are no significant changes in the Dacion En Pago solution that banks can offer. Each bank has freedom to determine the requirements and take individualized decisions for each particular case, considering property value, financial situation of the mortgage holder, internal bank regulations, etc.

    Regards,
    Patricia Martin
    Legal Assistant at Lawbird
    Check My Profile

  7. #7
    Unregistered
    Guest

    Default Unpaid personal loan abras

    I have a private loan in a Spanish bank and I have recently moved back to the United Kingdom. The pending amount on my loan is 27.000 Euros. Is there a chance that they can claim it boa that I am back in the United Kingdom?

  8. #8
    Unregistered
    Guest

    Default Download obb data

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