Possible Bank crash - how does it affect my existing spanish mortgage?

hear hear!!

 I think the word is F-----d. The suprise is that we are so suprised.  My number one rule is and always has been people , no matter who they are , will always do exactly what we let them do. . Oh, I nearly forgot, I asked to change my mortgage to interest only. I told them if they didn't they could have the keys back. This went on for about 2 months  before thet relented.

Thanks for the continuing education but I have to ask,do you have any suggested solutions to this increasingly complex financial conspiracy?

p.s.FYI, Smiley, Keith Rule aka Finca Parcs action group and Bank Guarantee petition www.bankguaranteesinspain.com (where have you been these last few years? )

 We could go on all night.Nobody is prepared to take responsibility for their actions. You only have to look at Greece. By all accounts , they only have them selves to blame , but will they change their ways.Not while they keep getting bailed out , as they appear  to have been many times before. Spain is still as bent as ever because there is no one there to police them. What is the ultimate sanction, no one knows because who would apply it. What I can't work out , is if we all want what's best for us , how come we all have different ideas about how to achieve it. It would appear that there is no one , that I have heard about with the moral fibre to stand up and lead the way and set a good example. We have  been tutored to want. It's easy to dole out money to people to cuury favour and votes. But it's another matter to try and take it off them.  Ooohh, I like a good ramble.

 We could go on all night.Nobody is prepared to take responsibility for their actions. You only have to look at Greece. By all accounts , they only have them selves to blame , but will they change their ways.Not while they keep getting bailed out , as they appear  to have been many times before. Spain is still as bent as ever because there is no one there to police them. What is the ultimate sanction, no one knows because who would apply it. What I can't work out , is if we all want what's best for us , how come we all have different ideas about how to achieve it. It would appear that there is no one , that I have heard about with the moral fibre to stand up and lead the way and set a good example. We have  been tutored to want. It's easy to dole out money to people to cuury favour and votes. But it's another matter to try and take it off them.  Ooohh, I like a good ramble.

Ads - there are lots of Keiths in the world ..... too many members on EOS these days for me to follow every single thread..... as to where Ive been the last few years ..... I couldnt possibly comment ;-). I tend to float in and out of things mortgage related as the mood takes me......and I guess as long as the thread engages or if there is a direct question I can answer ..... I zoned out a couple of years ago for personal reasons.

As to solutions to the problem.......JD is on the money when it comes to speaking of action for the sake of action..... the "inner sanctum" has too much power and money for any of us mere mortals to make an impact....... all one can do is vote one political party out of power in favour of another ..... as Roger Daltrey sang "meet the new boss same as the old boss". All politicians these days (except maybe Nigel Farage from UKIP who is in Brussels - I havent heard anything detrimental and I dont think he is afraid of who he offends) are motivated by self interest, they are more bothered about their voter appeal than they are about truth and integrity - largely they have the morals of an alley cat (apologies to feline friends). I guess for the next elections a way of registering dissatisfaction is for nobody to turn out to vote.......unfortunately that isnt going to happen.

Until there is a lobby in Westminster that places integrity and honesty at the very top of its list of priorities the problems of the past will continue to be the problems of the future. News Corporation or the next media mogul will continue to be King maker or destroyer and tone of voice and colour of suit will be more important than substance and character.

Come on the Tooting Popular Front! 

ads,

If you're asking for a relatively quick, write-to-my-MP type of solution, then I don't believe there is one. We are much too far down the rabbit hole for that.

Besides, how can there be a solution to a problem of this size while most people don't even know what the problem is - or its scale? Your question is akin to asking how to stop the corruption that ended the Roman Empire. The cancer in that society proved terminal. There were no quick fixes then or now.   

If someone like Brooksley Born knew that fraud is/was rife, was head of an agency whose main purpose was to prevent it, but was still unable to do ANYTHING about it despite her best efforts, then that should be a clue as to what we're up against.

Do you think if you asked her for a solution, she would know? I doubt it because, if she did, I believe she would have done it.
   
The only hope that I can see is a slow process. However there's no guarantee of any success. Sorry, but it is what it is.

The first step is for each of us to understand what the root of the problem is, what it isn't, and not waste time and energy seeking that which will not solve it. My experience is that just trying to solve that problem and get people to accept it is hard enough!

As I said before: To effect lasting change, It's taking the right action that matters. e.g. The Berlin Wall didn't come down because people petitioned for better regulation. 

Dear All,

Thanks to JD and Smiley and of course Justin for the opportunity to be educated.

unfortunately I am of an age that requires the quick solution but a start for the sake of the kids and grankids would be good.

political interest is slight but in ignorance condemn Maggie for giving away the council houses, Blair for his sleaze/croneyism and actions, Brown for giving away our gold reserves etc.

Nigel Farage entertains me and I would swop him for this lot tomorrow, but from experience believe you cannot even beat the party system and the totally insane royalty system or the celeb worship system.

So I agree, there is little to be done except to borrow on mortgage and buy silver to tide things over.

But many thanks for the explanations - most absorbing and not drone at all.

Regards

Norman

Dear All,

the Rees lecture chappie this morning told us that excessive financial regulation is the disease that purports to be a cure - he promises all the answers in the next three lectures.

Regards

Norman

Hi Norman...

I'm wondering if you watch The Keiser Report on RT...since you mention buying silver.  Where can I see the Rees lecutres?

well,

the silver idea came from adviser info that tells us that China is setting up a bullion market of it's own in July and the population will be buying up all available stocks with a positive effect on price.

the rees lectures are on radio 4 - 9 this morning and weekly thereafter.

hope that helps

Regards

Norman

Silver has generally been perceived as the poor relation to gold but in the same way equally as under-valued (see Bunker Hunt Brothers 1979-80). Gold is the traditional safe haven commodity and silver normally follows slowly behind - there has been a relatively steady rise to about £18 an ounce - several of the big boys were short of silver contracts during the course of last year which meant they had to cover shortfall which pushed up the price --- some MAY still be short ---- personal view is that market could have further to go up to mid £20s and maybe beyond ----- but as always caveat emptor ---- markets can drop and past performance is no guarantee of future investment etc ----- commodities arent for the faint hearted and there is always risk

Just a thought Smiley and JD01, isn't the bottom line to the issue of regulatory and legal enforcement, that until such time as enforceable controls exist in Europe, that buyers of real estate across member states that refuse to recognise the lack of enforcement that you have identified as expressed below, are potentially far more at risk.

Therefore it would follow that if this message and educative detail was relayed loud and clear to all and sundry, wouldn't the powers that be that you criticise for failing to enforce (and all those aligned and associated professional bodies for that matter) be far more incentivised to clean up their acts?  

Citizens would have the power to vote with their feet ,so to speak, which in itself would act as immense pressure on Governments to reform the Banking systems etc and create better consumer protection for their citizens.

Who are the 'buyers' that you speak of that would be at risk?

And why would the people responsible for removing/creating regulation that prohibited/allowed them to sell toxic assets care?

They're not at risk. That real estate (and the larger derivatives mountain piggy-backed  off it) are the hot potatoes they've worked so hard to offload onto those 'buyers'. 

May I ask, does this real estate that you refer to as "hot potatoes" include the real estate that Banks hold in Spain, that they are still trying to offload?

I am not sure that I fully understand the post either Ads.

Any significant purchase is always carries the underlying caveat emptor.

As to buyers of real estate if/when they return. I came to Spain in 2003 as a UK qualified mortgage broker. I was gobsmacked by what I saw occurring here - it was like a bad day in Dodge City. When I spoke to real estate agencies regarding business introduction and explained that as a company we would operate as if we were in a regulated environment almost to a man/woman they told me we would never survive a year. Well its 2012 and while it has been bloody difficult at times we are still here (just hanging on by a thread). Real estate agents werent interested one iota in whether a client could genuinely afford the mortgage - or whether they could get a mortgage product that bore some semblance of transparency and fairness for the client - it was simply a case of get them the mortgage at any cost whether they could prove income or not, whether they had good credit or not - forget all the usual UK best practises! The response from us was in the negative and consequently those agents (the vast majority) chose not to support us. Thankfully there were a few that had integrity and fed us until we found alternative methods of business generation.

When it came to real estate sales themselves the vast majority of agents had a massive bias towards off plan. It was quick, it was easy they could arrange multiple sales (never bothering about what would happen if the client could not "flip" in the interim and had to complete). The vast majority were receiving a huge upfront commission from the deposit received by the developer - the highest I was aware of was 21% (of total price), the lowest 14%.

Now we come to the buyer themselves. Whilst many of them were motivated by genuine desire to own a holiday home in Spain, I would guess that it was an even split over those that never intended to take ownership at completion. From 2006 onwards we started to receive mortgage enquiries from off planners.......the number of them that would never qualify for a mortgage in Spain was massive ...... when the question was asked (as it invariably was) why they had followed this avenue 9/10 times the answer was to "flip" before sale to make money.

I am not trying to take the moral high ground and I think I mentioned previously I believe that a degree of greed is good. But the volumes of people simply backing the Spanish housing market to turn a few thousand quid was beyond simple greed - in many instances I can only liken it to sharks in a feeding frenzy. It was probably a fitting example of a massive Ponzi scheme because the agents were generally not going to sell resale properties and earn an average 7% commission (as it was then) and go through the trauma of a chain of people, when they could sell artists impressions looking at a plot of land and their own interest in the transaction was done and dusted in about two weeks.

On the odd occasion I spoke to clients pre-deposit (even highlighting the risks involved) and asked why they werent considering something they could physically touch and see instead the response was almost unanimous ..... I will make more money this way. 

As JD says those that make the rules have no real incentive to enforce them - they have too much to lose. As to people voting with their feet ---- lets see if 100% of the electorate stay at home at the next election. If no party could return any MPs to Westminster (or indeed in Madrid - good luck with getting the Spanish on side).....or Brussels it would probably send a message --- resulting chaos would be interesting too. Nonetheless its never ever going to happen. So I am not sure where this exerting of pressure is going to originate.

The message has already been taken to Brussels and Westminster by unhappy homeowners -- by more influential people than me. Has the UK done anything to make Spain deliver some form of compensation.........has Brussels........

The problem now is that even if they did the compensation would have to come from other member states of the EU.....Spains broke!

JD will have to confirm him/herself but I suspect that is correct. The banks are now offloading toxic assets with 100% finance (or more) on properties at for instance 50% of their original PP. The Bank of Spain is permitting them to give non residents 100% finance in order to get rid of the bad debt. Problem is that the toxic asset is very likely now worth (in real market values) 30 to 40% of its orignal sale price. Hence the new owner is immediately in negative equity at completion. 

 I am currently looking at property and as a non resident I CANNOT get 100% finance from any of the banks who own property I have looked at.  Such a deal is only available for residents as far as I can see.  BTW - I don't want a mortgage at all, but the bank people I have seen have all said the same.  

I am hesitating over making an offer on a fantastic property I have seen (not a repo but a distress sale), and the doubt is just whether prices can go any lower.  I am looking at a lot lower than 50% from the peak of 2007!!!! 

 Sorry Bri, but your problem is?  You don't need a mortgage, you have a deal that is lower than 50% from 2007, you think it is a fantastic property?  Unless you are doing it purely to make a profit (and, I might add, profiting from a "distress" sale) then what is stopping you?  Regardless of what you read on chat sites, thousands of people do this with no problem.  If you want the property at such a bargain price, why not go for it?  If the prices go lower, so what?  Of course, you could make a profit from other people's misery as so many try to do.  If you lose the "fantastic" property because of greed and making a fast buck then you can look back and say "well, I still have my money".

Good job we don't buy cars like we buy houses.  None of them would ever leave the showroom.

 Just making the point that as a non resident you (or at least I) cannot get a 100% mortgage.  And I think from your tone the question is what is your problem???????   From my post - where did you read that I am stupid enough to think I can make a quick profit????

Make a profit????   |As a property owner in Spain  already - I really fell about laughing at that!!!!!!