Legal tip 754. You need to buy again in Spain

Legal tip 754. You need to buy again in Spain
03 May 2012 @ 13:55

We have been fighting bravely along the years in order to have Banks liabilities recognised and these afflicted the corresponding legal punishments according to Law 57/68. ( Thanks Keith Rule for your encouragement on this)

We see the national elements  which contributed to the Spanish disaster ( mainly lack of  control by Bank of Spain)  as we stated in this old post dated 8th of March 2009:

"As one of the majors causers of the current financial unbalance and as excessive earners as they were during the real estate boom, it is time for them to offer a social help in order to bring normality back to the real estate arena and the financial status of the world. Time to reduce those obscene benefits in favour or restoration of financial order. I think this is where most of the needed oxygen needs to come from. But I am not an economist and have no expert knowledge. It is just a common sense thought related to balance and equilibrium".  

but we also see the International/ European roots of the same.,as explained in this other post dated last May 2011

"I think of Paul de Grauwe´s statements made in 1998 and wonder what he thinks of current situation of Spain. I guess he thinks that Europeans need to complete the Spanish dream, as it is not a dream we spaniards had alone. 

We dreamt together, let´s work together for it to be completed:

This is a very telling paragraph of De Grauwe´s thinking, written, as you know, back in 1998, before everything started:

Suppose a country, which we arbitrarily call Spain, experiences a boom which is stronger than in the rest of the euro-area. As a result of the boom, output and prices grow faster in Spain than in the other euro-countries. This also leads to a real estate boom and a general asset inflation in Spain. Since the ECB looks at euro-wide data, it cannot do anything to restrain the booming conditions in Spain. In fact the existence of a monetary union is likely to intensify the asset inflation in Spain. Unhindered by exchange risk vast amounts of capital are attracted from the rest of the euro-area. Spanish banks that still dominate the Spanish markets, are pulled into the game and increase their lending. They are driven by the high rates of return produced by ever increasing Spanish asset prices, and by the fact that in a monetary union, they can borrow funds at the same interest rate as banks in Germany, France etc. After the boom comes the bust. Asset prices collapse, creating a crisis in the Spanish banking system.

http://www.eyeonspain.com/blogs/costaluz/5546/legal-tip-527-on-europe-banks-and-spain.as

This is why, we think that, after the effort made by the current governemnt for Banks to bring correction to the real estate market, you, Europeans, need to buy again in Spain.

I am asking this to you kindly and firmly: the product was made for you, inflated by lack of control, but once Banks are paying their sins and selling the products at real market´s prices. You need to buy again in Spain. :

Prices are fair and good enough now

Comments?

Maria,

My wife summed it up perfectly.

If only the banks stopped us having to go through the courts to reclaim our monies then it could :

1, restore our confidence in Spain

2, release our cash to enable us to buy

3, Banks would sell properties on their books which they hold

Vicious circle as in many cases the banks have not protected off plan investors but it is only the banks that can break this circle.

Perhaps, the lawyers should approach the Bank of Spain and impress this position onto them.

Reduce the costs, time and stress. Restore confidence to the previously committed purchasers, realease our cash so we can buy and this will then improve your economy !

I wonder how much the banks have which could be claimed under Law 57/58 ?

Rob

Yes Rob your wife has hit the nail on the head.

Until confidence is restored in the Spanish property buying system, people will avoid putting their hard earned life savings there.

Justice must be seen to be done not just promised. Actions speak louder than words, so please Spain pay back that which has been effectively stolen from those trusting people  you fleeced and you might just see a return of buyers.

It doesn't matter how cheap the property is or even how cheap the property becomes without my money back  I cannot afford to buy again.

 Keith: would you lobby this idea before Bank of Spain?

http://www.eyeonspain.com/blogs/costaluz/6990/legal-tip-745-banks-properties-for-banks-liabilities-(2).aspx

It is what we have been naming since 2010: " Banks properties for bank liabilities"

Rob, have that wise wife of yours joining Keith Rule´s efforts.

Legal tip 745. Banks properties for Banks liabilities (2) 
18 April 2012 @ 13:17 

But the reality is the bank do not want to hand over the liability (I would not call it liability, it is our money). They probably believe that some unfortunate people will not take any legal action against them and they will retain other peoples money.

Then the relationship between the bank and developers....

Whilst my wife's approach is simple and correct, it will never happen becasue it is a game that the banks and policticans wants to play.

I am sure it will happen. Case Law is clearly stablishing banks liabilities contained in Law 57/68 and they NEED to sell properties.

Maria,

I hope you are right but surely if the banks realise the courts are up holding the law then why do they continue to defend such cases.

Why not admit liability and agree out of court settlement, we get our cash quicker and then can look at buying another property. But no, we face at least a year of court action which takes away the appetitie to reinvest and damages the confidence and trust even more.

This will delay and reduce the amount of cash which could come into the Spainish economy. As I mentioned before, a vicious circle which only the banks can change. Perhaps, someone of influence should contact the CEO's of each bank and come to agreement to resolve these issues instead of the forced court actions.

Free up the courts and they can then deal with the fraudulent developers who should be made to account.

María

The banks in US first caused this problem. The banks in Spain have acted in exactly the same way (ie without any controls) and continue to do so. They are only interested in finding new ways to make money from their customers and charging for everything. If they get into difficulties, they get funds from Europe to be rescued or sell out to another bank or financial institution. I dont see that the banks are realising the error of their ways. Unless the banks can be controlled more, (which they dont seem to have been able to do by the way in US), we run the risk of a similar or worse situation occuring again (thats assuming we can recover from this crisis!) This is not all of the problem, there are many, but it would make a great difference.

Would it not be better for all, if the government took all the properties from each Bank in return for some capital injection and  let them get on with Banking and not trying to be a real estate agent. The Goverment would then set up a property Bank which would have all the houses with them, yes they would be in the red for as long as the property was on their books. It would provide a central contact point for all Bank repossessions thus reducing the cost of advertising and selling the properties. This may then allow the properties to be sold at a realistic price, maybe even encourage developers to take over small unfinished developments on favourable terms. Even the properties which are not in the best condition or in areas which expats of which ever country do not want to go to now, the goverment could take for social housing with a small percentage of the income being paid to the property bank.

This would then save the other banks for being brought down by what was greed by builders and the short sightedness of the Banks that the expats would oneday stop coming to buy in Spain. I know of builders who have gone bust owing millions to the Bank and are now trading again under another name.

Maybe another option would be to offer loans to private people to buy a property and renovate it and then when the property is sold, they pay back the loan from the profit, this would be self financing and should always be there as the loan paid out would be paid back into the pot for it to be loaned out again for another project.

We all want the confidence back in Spain, people still want to come to Spain to buy and to live but they are worried that things will go wrong. The English newspapers are the worst at putting down this great country.

NOW is the time to buy.

Damatt

Justin,

isn't that blatant advertising????

Norman

We need a financial ombudsman and fast track courts to enforce justice, return monies and then allow people to invest if they still wish. So long as the Banks play cat and mouse games with innocent people's lives, the respect and trust will diminish.