Spanish Bank Pursuing UK and Irish Assets

Hi all,

Like manyIi am strugging to repay my spanish mortgage which is now in negative equity for probably €50k.

As far as I understand i can't sell the property and continue paying the remaining mortgage i.e. for the negative equity portion - as to sell you need to full clear the mortgage. I could try and negotiate to go interest only repayments although I suspect this is just postponing the problem.

If I hand back the keys i believe the Spanish Bank can pursue me for assets at home (Ireland).

I'm just wondering what the reality is - how easy or difficult is this for a spanish bank to chase assets in UK or Ireland ? Will the bank likely cut its losses rather than spend more money chasing the remaining balance w.e. with a European Enforcement Order (EEO) to enforce a Spanish judgement ?

I've not been able to see the reality via any statustics but I have found legal firms advertising their services to chase up EEOs

Any guidance on the reality ?

Thanks

Sorry to hear about your situation and if it's any consolation you are definitely not alone in this.

I met with a very senior regional director from a major Spanish bank recently and I asked him this very question.  He told me that the reality is that they wouldn't bother chasing any clients abroad for the simple reason that if they managed to, for example, take someone's house back home, what would they do with yet another property but in a foreign country?

He said it just wasn't worth their while doing it.

And here comes my disclaimer....

That's just one bank and what the director told me.  Every bank is different and every case is different.  Everyone has to make their own decision as to what to do in their own case.

If you want to go down the dacion en pago option then I assume that to show you can't afford the mortgage then you must stop paying it.  I did a similar thing to force my bank to change mine to interest only, something they were reluctant to do previously.

We are all in negative equity these days as the market continues in decline.  If you want peace of mind then force the bank to lower your payments to something you can comfortably manage, otherwise take the risk, walk away and hope that what the director told me is true.  If you really can't afford it then you have no option other than handing the keys back and counting your losses.

Best of luck.

 As Justin says everyone is in negative equity so that is not a major issue right now, banks are fully aware of it. The next step after negotiating an interest only payment is to negotiate a reduction in the outstanding capital to be returned, ie they pardon a % of the debt to bring down your monthly payments. Depending on the size of the mortgage it could be useless or significant depends.

If your position is worse than this, as it is for many your only option is try for a Dacion en pago as Justin mentions, but many Banks are forcing debtors to pay for new valuations on their properties and then offering to buy it for that price. You are then left with the remaining debt which they will happily put into a long term mortgage for payment. So kind of them! However there are some cases where this is being done correctly and you are left free of debt. However for the Bank to even start listening to this option you must have stopped paying your mortgage for at least 3 months. They will then want to contact you for the outstanding payments and this is the time to explain your situation. In fact if you have a good bank manager, explain the situation, don't talk out other assets outside of Spain if you have them, and it will probably be the bank manager that tells you to stop paying the monthly payments, if you are to make progress.

If this doesn't work and you have to just walk into the bank hand over the keys and the title deeds and run the risk, make sure you pass by the courts in your local town and inform them officially that you are bankrupt and cannot fullfill payments and that you have handed over the keys and deeds to the bank. According to what I have been told it would be your only protection against committing a crime.

Thanks Justin & Mac75

That gives some food for thought and an bit more insight into the reality.

Cheers

Madgollfer