Pain in Spain

esurian

Does anyone out there know what would happen if I simply give back the keys to my Spanish property to the Spanish bank (Bankia) who I have the mortgage with?

ILW

They will have the right to persue you for any shortfall on the sale price.

Do you own any other property or assets?

Brock_and_Roll

ILW's questions are very important.

As I banker myself I suspect what will happen is that the Spanish banks will spend the next few years in utter turmoil, but at some point along the line, mortgage debts will be sold on to debt collectors who will pursue those who owe them money WHEREVER they live.

If you hand back the keys, the property may well be sold in a firesale increasing the amount you owe them. Rolls forwards a couple of years, add a load of interest and charges and you could end up owing an aweful lot of money - so if you have a house with equity in the UK, a good job or other assets, they are at risk.

Conrad

Somone I know was caught up with after 10 years and presented with a £52000 bill. He offered just £2,500 and they accepted.

Personally I cant see Spanish Banks pursuing people in Britain, there are hundreds of thousands throwing keys in.

ILW

Conrad wrote: »

Somone I know was caught up with after 10 years and presented with a £52000 bill. He offered just £2,500 and they accepted.

Personally I cant see Spanish Banks pursuing people in Britain, there are hundreds of thousands throwing keys in.

Sounds like a massive opportunity for the debt companies to be buying up these debts for peanuts and making a killing.

I would suspect that the majority who own spanish property also own property in the UK making them pretty good prospects.

harvey115

ILW wrote: »

Sounds like a massive opportunity for the debt companies to be buying up these debts for peanuts and making a killing.

I would suspect that the majority who own spanish property also own property in the UK making them pretty good prospects.

That would be a good business...

I think the person Conrad is talking about possibly only owe £2,500 to the bank any ways. The debt collection company may have added all those extra charges in terms of fees, this and that. I guess this is why they accepted the offer.

Trollfever

ILW wrote: »

Sounds like a massive opportunity for the debt companies to be buying up these debts for peanuts and making a killing.

I would suspect that the majority who own spanish property also own property in the UK making them pretty good prospects.

I would guess that the "vulture funds" are gathering to snap up parts of the mortgage books of distressed EU Banks.

seven-day-weekend

There is a way you can negotiate with the bank if you can't pay, but I can't remember what it is.

Try asking on https://www.britishexpats.com

Ganga

esurian, rather than hand back your keys (and still be in debt to the bank) can you not sell the property,even at a loss and negotiate with the bank for the difference?

WellKnownSid

You really need to take this up with the bank. It's all in complete chaos here at the moment - there is a mechanism for officially handing the keys back in Spain called the Daci!n en Pago, but requires a certain agreed level of equity.

They may ask you what you can afford. Several smaller "cajas" are doing all they can to avoid this option simply because they cannot afford to take on all the extra properties - so they just extend the mortgage over another, say, 30 years to make the numbers work.

I see no reason why the banks won't chase people for money in the UK. They'll have no trouble finding you - the tax authorities talk all the time, and they'll have all your original details from the mortgage application.

If it goes to court, I doubt the bank (or agent) would get away charging the punitive fees that most banks here charge (I know someone who defaulted on their mortgage and hit 6,000 euros in "fees" in the first month). I suspect any UK court would see through that.

cclarke12

WellKnownSid wrote: »

You really need to take this up with the bank. It's all in complete chaos here at the moment - there is a mechanism for officially handing the keys back in Spain called the Daci!n en Pago, but requires a certain agreed level of equity.

They may ask you what you can afford. Several smaller "cajas" are doing all they can to avoid this option simply because they cannot afford to take on all the extra properties - so they just extend the mortgage over another, say, 30 years to make the numbers work.

I see no reason why the banks won't chase people for money in the UK. They'll have no trouble finding you - the tax authorities talk all the time, and they'll have all your original details from the mortgage application.

If it goes to court, I doubt the bank (or agent) would get away charging the punitive fees that most banks here charge (I know someone who defaulted on their mortgage and hit 6,000 euros in "fees" in the first month). I suspect any UK court would see through that.

I am currently trying to get CAM bank to agree to a dacion en pago (handing back keys and debt being written off). I have hired RDT abogados who have offices in London to try and pursue this for me as I have got nowhere trying to sort this myself. CAM bank are quite frankly corrupt and have told endless lies and misled us over the years, but I was getting nowhere so felt no option but to appointment a lawyer on a fixed fee to try and see if they can make more progress. I don't know that we'll be successful but it is worth a go and they claim to have a lot of success. What is already clear is that bank are going to put up a real fight.

Our place has been on the Market for 5 years but noone is buying at the moment, even at half the price of the original bank valuation. We were naive and have been told by several lawyers that at the time the bank managers were giving valuation people backhanders to over value properties so that non-resident mortgages went through and they got their commission.