Home Repossessions in Spain: A Legal Perspective

[joanne hill]

our Spanish property was valued by the bank at 300,001 euros the property was on sale for 240,000 euros.
Since buying the property in September 2007 the value has plummeted to 190,000 euros.
Do i have a case for negligence against the bank. I believe i have been subject to very unprofessional behavior from the bank. I believe my property was deliberately overvalued so a 110% mortgage could be sold.

[Lawbird Lawyer]

Dear Madam,

No, I don't believe you have a case.

Yours faithfully,

[Nicky]

We too have been caught in the credit crisis. We have two mortgages on two separate properties but with the same bank. Mine and my husband's work has dwindled and this coupled with the high interest rates we have been paying over the last year have left us drained of all money and savings. There is equity in both properties. We have been in talks with the bank for the last 5 months and they are finally lowering the interest rate a little but still the repayments are too high for us. We would be able to afford interest only and keep both properties which is what we would like to do but the bank will not let us. Indeed even though they are reducing the interest rate a little they are now asking for life insurances for myself and my husband which puts the costs up again.
If we hand the keys back to the bank can they take our other property and thus make us homeless. On recent valuations there is more than sufficient equity in both properties and we have had them both on the market but they are very few buyers at the moment and we are running out of time. Please can you give us some advice of what we should do next. Thank you

[Lawbird Lawyer]

Dear Madam,

We've written a detailed article on the dación en pago procedure (handing back the keys to the lender) and submitted it to admin but we are still waiting for them to publish it...

When they finally do I'll post the link to it.

In the meantime, you can read a detailed reply on this matter in this thread.

[mrs Brewer]

Hi i have a morgage in spain of 81,000 euros my property is up for sale for 99,000 euros which i have just recently reduced. I desperatly would like to buy a property in England but handing my keys back in spain, would that blacklist me in England for a morgage?

[Lawbird Lawyer]

Dear Madam,

No, it will not affect you in the least.

Please read our featured article on Dación en Pago (handing back the keys):

The Dación en Pago Explained - 28th March 2009

What will affect you is if the Spanish lender repossess you. In that case not only will you be blacklisted in ASNEF, RAI, and Experian but also they may chase you in the UK for the outstanding debt or elsewhere.

[L palmer]

We like many can no longer afford our spanish mortgage, it is in negitive equity . Paying this mortgage in spain is resulting in us also being in difficulties here in the uk,we have contacted the consumer credit counselling service . We are a month behind with our mortgage in spain an we have not paid welth tax an community fees !!!. Our house is mortgaged in the uk an is specialy addapted for our handicapped daughter so i am scared of losing it if they come after us here in the uk, what can we do .

[spanish resident]

i am english and a spanish resident and am being repossessed, the property is in negative equity, if i return to the uk will the spanish bank persue me there?, i have no uk or spanish job, and no assets in the uk. not sure what the spanish bank can do and surely noone (another bank) will buy their bad debt and persue me due to me having no assets at all, and what can a debt collector do when i have nothing for him to collect? like mrs johnson, worse mistake of our lives!

[bill]

Dear Sir/Madam,we have not paid our mortgage for over 1 year now,but have still not heard from our bank or any other authority.we approached our bank months before we saw ourselves not being able to keep up the repayments.our bank manager said he was not interested,and would personally reposses our house.We have since found out ,the mortgage was for a vivieda,we own a nave.The bank will not speak with us now,but still no letters.HELP

[Lawbird Lawyer]

Dear Mr Palmer,


That's up to your Spanish lender. They will decide on whether they pursue you or else sell on the debt to some other company, such as a debt collecting agency.

Normally Spanish lenders do not pursue abroad for small amounts as its expensive for them and would be hardly worthwhile. It all boils down to the amount outstanding owed to them. If its high enough it will be worthwhile for them to pursue you abroad or else sell on the debt to someone local who will.

If your UK property already has a mortgage against it, much of the equity is already compromised. So the Spanish lender would just place an additional charge on it. If they repossessed it it would be your UK lender who would obtain the lion's share as they were first and have priority.

So it makes sense for the spanish lender to just wait patiently until you sell it on. From the sales proceeds, the buyer will have to pay them what they are owned.