Where are all the repossessed properties

[Jwacg]

Can anyone tell me why there are no for sale sign boards up for bank owned properties in Spain. Where I live on the Costa Blanca we know of hundreds of properties that have either been repossessed or people have given the keys back but not one foreclosure board has been put up.

Any explanations please!!!

[Lawbird Lawyer]

Dear Sir or Madam,

Umm, we thought we had explained why on our last blog post:

Bank Santander Estimates Property Prices in Spain Fell an Average of 50% on the Costas and 30% in Cities (http://belegal.com/wordpress/bank-santander-estimates-property-prices-in-spain-fell-an-average-of-50-on-the-costas-and-30-in-the-cities/) - 21st April 2010

It has to do with the Laws of Supply and Demand. If lenders flood the property market with repos and adjudicated properties on NPL it will saturate and prices will plummet furthermore which ultimately will affect their balance sheets at a time where bank's stocks are falling everyday on the stock exchange amid concerns on new sovereign defaults Ã* la Greece.

This in my personal opinion would have been a good idea as we would be like the Republic of Ireland where property prices have been left to fall freely unhampered by the Government -and banks- and have now almost bottomed out. As a result some banks needed to be bailed out as they were on the brink of filing for bankruptcy but on the whole it has been positive for the Economy at broad as the country is now back on track on the road to financial recovery.

In Spain, higher minds have chosen instead the Japanase solution which means hiding bank's losses, fidgeting with balance sheets and deferring losses in the hope that Spain's property market will recover at some stage or other in the future aided by foreign investments (the sooner, the better). This second option implies that economic recovery will take much longer than the first option (the Irish one) perhaps even a decade following what happened in Japan. Property prices in Japan have been falling every single year for 15 consecutive years following the collapse of the mother of all real estate bubbles. You can read this article on the matter.- http://www.nytimes.com/2009/06/07/business/economy/07view.html

Fortunately for Spanish banks, our Government has just passed on new legislation whereby there is no need to value these troubled assets mark-to-market and can be valued at 2006 prices if neccessary.

It just goes to show how nice and easy life can be when you have friends in high places looking after your interests.

Yours faithfully,