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Just thought I would let you know that my family member has just been given the real "Dacion en Pago" by Banesto. Zero debt and mortgage cancelled. I am quite amazed that it went so smoothly for them. No hic ups, no excuses, no tricks and just plain straight forward. So quite clearly it is not a myth and is actually happening. The real shame is that they didn't start doing this a few years back. Thousands of familes would be in a far better postion now. All I can say is that it is possible so if you find yourself in this position, insist and insist and they will probably come round. If you have a decent bank manager he should infact offer you it if your situation is dire.
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Ian : EOS TEAM MEMBER
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www.eyeonspain.com/blogs/ianandspain.aspx
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That's great news and must be a huge relief to your relative. I too know of someone whose dacion was signed this week after 2 years of battling with their bank. . Let's hope this will become more common for those who are in desperate circumstances.
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Eos_Ian: Congratulations and great your family can go for LIFE again!!
Cheers!!!
Maria
This message was last edited by mariadecastro on 08/11/2012.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Hi, I have just seen this discussion and wondered if anyone can help me.
My question is ..if I cannot afford my mortgage anymore and my property is not worth what I owe can I go to my bank and tell them I want to hand back the keys... Basically can I insist on this 'Dacion en Pago'? If so do I have to be up to date with my mortgage payments ( currently I owe this months payment, but I may be able to clear this if it gets me out of the problem). Also, is there anywhere that tells me how to do this properly, as I dont want the bank to say I didnt do it properly and then deny me the right to do it... please any help would be grateful
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Hi,
You will see earlier in this thread about my situation.
I had a mortgage of 475,000 euros with La Caxia on a house that I built from scratch.
I told the bank I could no longer pay the mortgage due to lack and explained it was up to them what they wanted to do, either dacion or through the courts, the decision was up to them.
I stopped paying my mortgage payments straight away.
The bank accepted and agreed to a dacion. I paid not one penny in costs or fees to the bank and did not need a lawyer.
Although I have lost the 300,000 euros I spent when I built the house, I am free.
The Spainish banking system is broken. Spain is broken.
Get out now whilst you can. Do not be intimidated by banks.
When Trokia arrive soon, due to Spain needing bailing out - wait and see what spain will be like. It will be a blood bath.
Property prices need to drop another 30%.
I have lived in Spain for 8 years, I have three kids in school in spain, I work in the financial markets as a full time job. The writing is on the wall. Dont beleive what the Spanish government say. The system is broken. The Spanish people are broken.
Be strong with the bank. I was in control and I got what I wanted in the end at no cost and Im now longer tied to paying a mortgage on a worthless property that value will only drop significantly further in the near and mid future.
Im not being negative, I love Spain and all the good things, but the politicians have ruined it and it cant be fixed. You must be strong with the banks.
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Thanks for your reply lfc1000 - I am sorry to hear about the situation you found yourself in, but I am glad to hear you are free from the worry and the debt.
I have contacted my bank to ask to discuss my situation, but my experience with them has not been so good. I had trouble paying my mortgage about 3 years ago and they made me take a second mortgage (even though I asked for a carencia). Now I find myself in trouble again and cannot afford to pay. I invested my saving in the deposit when I bought my property 8 years ago which is lost now, but I dont care, I just dont want this terrible worry hanging over me anymore.
I will take your advice and speak to the bank... I hope they will listen to me this time. Is it best to put everything in writing? Also, should I ask to speak to the bank manager straight away, rather than one of the assistants?
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Sorry I have another question .... does anyone know if the bank can embargo my salary? I dont earn much.... is there a protected amount (so I can afford to eat and look after my son) that they cannot take ?
...I have a job in Spain but I dont earn very much and the reason I cannot continue to pay my mortgage is because my husband has left... also he doesnt work in Spain and doesnt give me any money.
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Yes you need to speak to the director, although most of them are as much use as a chocolate teapot, as everything has to be referred to their head office, as all decisions are made centrally.
I would confirm everything you say to them in writing my email so you have a copy on file.
What are they going to do. You and me are just the top of a iceburg. They may offer you things like interest only or reduced payments for a while, theyll do whatever they can to keep your name on that mortgage deed for sure.
Of course, there is much talk about these banks chasing you up in the UK and taking your house off you and all that. I dont know if thats true or not.
Dont let it get you down and stress you out. You can do it and be free. I was worried at first, but I feel great now its all over and Im no longer paying into a asset that will only go down in value for the future.
Out of interest, the banks valuer valued my house at 50,000 euros less than the mortgage and they still did the dacion !!!!
The option is do you cooperate with them at the minimal cost to them and they get the banks property company to buy it off you.. or do they spend the time and money through the spanish courts trying to reposses it. Its a straight forward commerical decision !
Its obviously not that easy if you live and work in spain as the debt outstanding stays with you till you die. This is why you might have read about spanish people setting themselves on fire outside the banks and town halls as they cant bear to live anymore, that is tragic when life is not worth living anymore.
I am looking forward to seeing a spanish comedian become a politician just like what is happening in Italy.
The Revolution is starting VAMOS ESPANA !!!!
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Why do people keep blaming banks for these problems? the bank lends you money on what? a house, it must tell you what is required back every month, you must know if you can afford it.
The house in question is mortgaged for 400.000€ plus and had another 300.000€ spent on it, monthly payments must have been okay at sometime or the other, and the 300.000€ was savings that as it seems could be spent, so not to short of a few bob then.
Doesn't anyone anymore ask themselves anymore..."What happens to the monthly if i am sick" ..."What happens if suddenly i cant pay"..."Does my income NOW beat any outgoings in the future should any of this happen"...."Have i spent every last penny with no back up plan"
So the bank lent money without doing correct checks, like everyone keeps saying they do, is it only the banks that don't do correct checks then?
400.000€ mortgage with no interest added and paid back over 25 years is 16.000€ a year divided by 52 weeks = 307€ a week or every month 1230€.....sorry but to be able to okay this type of loan you can/could afford it.
So now the banks have told everyone your house will go up in value, in general folk hate banks, hate estate agents,,,but still believed them that it would always go up in value, anyone ask... if it don't how will we pay? why should it go up in value, thousands haven't in the UK, and also thousands have dropped in value.
I don't see to many problems with banks, after all is said and done what does a normal high street bank know about investments, they lend a dollar/euro/pound and want two back, anyone can run a business like that.
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Dear Baz,
Think your not reading my post correctly mate. Im not blaming any banks about anything.
I am making commerical decisions about my families future. I decided I dont want to pay 2400 euros a month for the next 25 years buying a bad asset and ending up with something that is worthless
Obviously, at the time, I thought spain was a wonderful place to live, work etc,,, but due to the global crisis, it aint like that anymore and never will be in the future.
My main point is do not be afraid of dealing with banks in a robust confident manner. They are stuck as much as everyone else. I was feeling bad at the time about investing all of this money in the house of our dreams, but now its all over I feel so much better and know I have made the right decision and will not regret it.
If you want to live in spain, rent, dont buy. Thats what I learnt !
Hope that clears that up.
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Think your not reading my post correctly mate. Im not blaming any banks about anything.
Wasn't solely aimed at you as an individual in blaming banks, but as a general consensus in as much as almost without fail folk keep blaming banks for what amounts to their own shortsighted downfall.
You have now put a different light on your plight, i wish you well.
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Legal tip 892. Hand keys back to the Bank VII . Out of Court sales-auctions
25 January 2013 @ 12:44
Government will finish in coming days a substantial reform of mortgage market in order to protect borrowers from the wave of foreclosures of last years.
The idea is "to improve the position of the debtor", dramatically lowering interest for late payment of mortgages on first residences, which may not exceed the legal interest (now at 4%) plus a surcharge of two points percentage. That is, at most 6%, compared to the average 20% that is being currently charged. There will also be time limit as interest will be guaranteed with the house just for three years (against current five years).
This change has been encouraged by 47 dean judges in Spain
In addition, the proposal currently includes provision 115 or Mortgage Act to be suppressed: legal right of the mortgagee to require the extension of the mortgage to debtor in order to secure interest due and unpaid.
The proposal also includes an out of Court procedure for the sale of the propertywhen the debtor defaulted mortgage.
How? At any time prior to the conclusion of the auction, the debtor may bring a buyer to Court paying at least the 70% of the appraised value for auction of the property.Once the Bank is notified, this will have "a period of 20 days to either bring a buyer paying a higher amount or repossessing the estate at that price putting an end to the procedure” Auction valuation presented by the debtor prevails over that made by the Bank.
Doors opened for the debtor to sell the house he cannot keep paying: this way, a private sale or private auction is possible. Anyone paying 70% of this valuation needs to be accepted by the Bank.
Previous posts on dation:
http://www.eyeonspain.com/blogs/costaluz/8218/legal-tip-849--dation-and-balance-vi-a-claim-by-judges-association.aspx
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http://www.eyeonspain.com/blogs/costaluz/9010/legal-tip-892-dation-and-balance-vii.aspx
This message was last edited by mariadecastro on 07/03/2013.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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Maria, thank you for the info... if i understand properly unfortunately I cant sell my property for 70% so I will have to put my fate in the hands of the bank ... Does anyone know if they will try to take my salary? Like I said I dont earn much .. think its just over minimum wage ... will they insist on this route? What rights do I have to ask for a dacion en pago? Also I dont blame my bank, my personal situation changed which I never imagined and also at the same time the economic situation has got so bad it has made mybproblems even worse.. my bank is not the cause, I just havent found them very helpful
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josolo;
All the rules are in here;
http://noticias.juridicas.com/base_datos/Privado/l1-2000.l3t4.html#c3s5
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Todos somos Lorca.
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Thanks guslopez ... unfortunately my spanish is nowhere good enough to understand legal documents like this, but thanks again anyway.... its so worrying not knowing and I cant afford any help ... I will just have to wait to see what my bank says Thanks all
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You can sign up here & make enquiries , ask questions , etc; depending on the circumstances they will supply free legal-aid.
You'll really need someone who is reasonably fluent in spanish.
http://www.migrar.org/migrar/index.htm
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Todos somos Lorca.
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Hi everyone, Has anyone been told or heard that it is against the law in Spain for a bank to agree to a dacion en pago if you are still in employment? I thought it was purely based on ability to keep paying and if you can show you dont earn enough the bank can agree a dacion if the want.... .... when I questioned this I was told to go to the Notary office and they would say the same?. Is this right because I havent seen this mentioned anywhere? Thanks Jo
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I should think as long as you can prove your income is less than when you took the mortgage out it may be considered. The bank will request bank statements, a p60 or any other paperwork you can provide to prove your inability to pay.
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