Bank Repossessions

Good news Nick

Enjoy the weekend IN the swimming pool.

Not wishing to contradict Roy as I am sure there are indeed many happy purchasers at current prices in Spain.

the fact though does remain is that there are still a lot of dodgy deals going on perpetrated by incompetent legal advisors not getting debt certificates from Administrators for new purchases, Agents who still try to sell you the dream rather than reality and banks who continually flaunt the rules by not always paying fees due on repossessed or Dacion property, preferring to try and offload before lodging change of ownership in Land Registry.

Banks often tell new buyers that there is no debt when there is and you guessed it the debt remains with the property and the new buyer becomes liable.

Estate agents in the UK due to non regulation have often been regarded as the lowest of the low in terms of integrity, they have recently been joined by bankers in their treatment of Communities and individuals..

On our Community we have recently had a situation of a bank stating to a bankrupt owner that they will only take back the property IF the bankrupt pays all the Community fees and IBI owed.

Hence no mortgage payments and no fees paid, everyone is a loser.

a dilemma when mortgage is 180k and property value is 100k but losses happen in life, the banks should know this by now, given their record.

Spanish banking logic or what?

I think the bank a couple of years ago would pay back 2 years of debt on a property, im sure they tried make this into less time, i lived next door but 2 to a bank property that was empty for 4 years, the bank would not pay off all the debt it ran into £££££s

Yet more reason to regulate the Banks and rid them of their abusive deceitful malpractices that bring the industry into disrepute.

It's sad that educative postings are perceived as threatening or attempting to talk down the country when the genuine intention is to provide effective longer term solutions to ongoing abusive practices. Dealing with these problems in a piecemeal fashion on an individual basis, even though well intended, is not stopping Banks' or Lawyers' or Agents' malpractice at source. Only when this is tackled in a coordinated way with powers of regulation to effectively disincentivise malpractice in all its hidden forms, IMHO, will this ever be fully resolved.

Rather than reduce the liability of the banks and anybody buying a property to pay putstanding fees they actually increased the term to 4 years of fees

If s0mebody actually reads this thread they would believe that every agent is a crook, every lawyer is a liar and every bank is on on the scam which isn't the case

Every single week in Spain hundreds of people successfully buy and sell properties without any problems

It is up to the buyers to retain the right quality of legal support, to do the most basic checks which are easy to do

As I say to customers the value of a property can increase ot decrease and there weren't too many people moaning when the market was booming

Because of the low prices and exchange rate now remains a giood time to buy but it will ALWAYS be a gamble

Roy,

I can understand your stance, but the fact is that if you adopt the attitude of not trusting the vendor, the bank and agent you are less likely to get screwed.  You cannot trust the advice from your solicitor - I've used 3 and all proved lightweight.

It is a minefield, but on the other hand yes, there are some cracking deals to be had.  But anyone who is pondering buying/investing needs to do some serious research.  Never has "caveat emptor" been more true than when buying in Spain.

Yes Roy the liability on the banks to pay current and previous 3 years years of debt now exists BUT this does not make it easier to obtain the debt.In fact they attempt more elaborate means to avoid them, such as allowing the owner to keep the property but rent it out to cover the mortgage only, no fees paid.

It has been a continuous fight for our Community to supply paperwork, details, you name it to prove the debt and encourage payment..

We are often told by owners that the bank has taken back the property but no changes are apparent on Nota Simples

Banks really do delay re registering in case thye can sell beforehand and i can assure you may are sold without revealing debts owed

As previously stated, the rules on Dacions when you agree to hand the keys back are

There should be no negative equity for the bank to accept the keys.

Well that is virtually impossible on buildings completed between 2006-2008 as with Corvera for example

Cost of purchase 200k mortgage could be 150k value now 100k

The bank immediately has to break its rules and take a loss if it accepts the keys.

It may not be criminal but it is very poor business practice as assets are never written down to correct value as the property is in their books at a 150k value.

Poor regulation of banking assets.

I was under the impression that banks kept on writting down bad debt until it stood them at zero, if they then managed to sell their liability it would go down on the books as profit. There is little point in paying taxes when you have the opportunity of offsetting your losses against them, this would also include any unpaid charges attached to the property.

You may think banks write down some of their bad debt but how does that explain La Caixa telling an owner who has been declared bankrupt in the UK and cannot pay his mortgage or Community debt that they will only take back the keys IF he pays the Community and IBI debt off first himself.

what with?

I know the mortgage is 180k having checked the mortgage on the Nota Simple

i also know saleable value is approx only 100-120k

but now the banks mortgage is not being paid nor are the fees, stalemate, so everyone loses and the sorry owner has lost everything in Spain and at home.

hugh_man,

Many years ago I was appointed to the position of manager and buyer of a long established business, the turnover was low but the gross profit was high, after digging around I discovered a series of lock up pens containing stock that averaged some 15 years in age and was on the books at it's original price.

The directors almost had heart attacks when I wrote it off and then sold it off for a fraction of it's cost price, I ended up with no hidden stock albeit creating a record loss, however the next trading year was a level playing field showing a great increase in business by stocking new merchandise, any unsold stock was written down and cleared in sale periods.

Banks are still businesses and need to grasp the nettle where bad business is concerned, perhaps huge bonuses take precedence over good business practice. 

The banks will pften not write down a property to below the original mortgage debt and in the case if a developer defaults this often is mpt a problem because they will have typically only loaned around a third of the original listed sales price so a €50k property for example on Las Terrazes wouldn't actually loose money for the bank

They do not write doen the bad debt especialy if the property sits with SAREB

Never mind €100k value on Corvera now, try nearer €50k

Hephaestus

Exactly my point, banks nowadays need to learn sensible business practices and sometimes the first loss is the best loss.

They too have to realise that some investment properties grow but others fail, that is life.

I worked in banking for many years when it was classed as a reasonably honest and honourable profession, sure we had bad apples but what they try to get away with now is amazing.

Just moved my Community bank account to Sabadell from La Caixa as a protest against their attitudes. and late payments.

Will they give a monkeys? Not likely, there are plenty more customers they can rip off.

I read something recently that Spanish Banks still owed Community debt in Spain of over a Billion euros in total, important cash flow in many Communities.

Roy

Yes developer mortgage is normally low so losses are unlikely BUT mortgages from a defaulting debtor can be quite high if bought in 2007 and way above current value

What specific procedure has to be followed (and from which data source) in order to identify if any given property has an outstanding debt placed upon it?

Also in the case where property has been returned to the Bank following developer insolvency, is it a requirement of the Bank who has taken over possession of that property, for debt to be recorded associated with all offplan deposited monies placed against that property and due for return to the offplan purchaser (according to Ley 57/68) following developer breach and contract cancellation? Are these outstanding debts recorded against the property that subsequently comes up for sale?

What specific procedure has to be followed (and from which data source) in order to identify if any given property has an outstanding debt placed upon it?

Also in the case where property has been returned to the Bank following developer insolvency, is it a requirement of the Bank who has taken over possession of that property, for debt to be recorded associated with all offplan deposited monies placed against that property and due for return to the offplan purchaser (according to Ley 57/68) following developer breach and contract cancellation?

**** Are these outstanding debts recorded against the property that subsequently comes up for sale? ****

If you read the original posters post that started this you will see the answer to your above question.

The bannk cannot sell a property if all debt ts relating to mortgages or deposits placed on the property have been discharged in fact in the case specifically of Corvera where people have paid deposits and are still in dispute with the developer the bank cannot reclaim the property

In the case of outstanding mortgages this is registered against the property and therefore easy for a lawyer to check and with the community IBI and utility bills again easy for the lawyers to check but it is true that if the laayer fails to find these that the debt is transferred with the property and becomes the liability of the new owners, same process for a car in Spain

If howvever the developer has gone into liiquidation and buyers, for whatever reason have not completed on finished properties, they just become a non prefencial crediitor, for the deposits that they have paid, behind the banks and the tax man and the banks really don't care about these people or the money that was paid to the developer

We all know that deposits for offplan developments should be covered by a bank guarantee and thi was where the problems started but if a property is completed, with the COH issued the banks responsibilities are fully discharged

Again a real example are all of the people that contracted  to purchase on Corvera, that have paid between 30%-60% and the properties are completed, but for various reasons they refuse to complete. If Corvera go into bankruptcy these buyers will loose any money paid

Normally the lawyers,especially with a resale will insist that a retainer is paid to cover any other potential dets, normally €2k

The bank cannot sell a property if all debt ts relating to mortgages or deposits placed on the property have been discharged in fact in the case specifically of Corvera where people have paid deposits and are still in dispute with the developer the bank cannot reclaim the property

In the case of outstanding mortgages this is registered against the property and therefore easy for a lawyer to check and with the community IBI and utility bills again easy for the lawyers to check but it is true that if the laayer fails to find these that the debt is transferred with the property and becomes the liability of the new owners, same process for a car in Spain

If howvever the developer has gone into liiquidation and buyers, for whatever reason have not completed on finished properties, they just become a non prefencial crediitor, for the deposits that they have paid, behind the banks and the tax man and the banks really don't care about these people or the money that was paid to the developer

We all know that deposits for offplan developments should be covered by a bank guarantee and thi was where the problems started but if a property is completed, with the COH issued the banks responsibilities are fully discharged

Again a real example are all of the people that contracted  to purchase on Corvera, that have paid between 30%-60% and the properties are completed, but for various reasons they refuse to complete. If Corvera go into bankruptcy these buyers will loose any money paid

Normally the lawyers,especially with a resale will insist that a retainer is paid to cover any other potential dets, normally €2k

According to recent case law, I didn't think that Banks responsibilities become fully discharged if the FLO was not issued by the completion date as mutually agreed within a purchase contract, plus case law has also been established in favour of the offplan purchaser where details included within the marketing literature was proven to be misleading and never adhered to.

Likewise case law has also recently been established in favour of offplan purchasers for those where developers breached contracts and subsequently went into insolvency but generic BG's existed (as opposed to individual bank guarantees). Also some Banks have been found liable for return of monies where no BG's have been provided by virtue of the fact that some judges now recognise all articles contained within existing law Ley 57/68 which provide inalienable rights to secure their offplan deposits.

So I wonder if these are the instances that are being fought by offplan purchasers on the Corvera development? Developer bankruptcy does not therefore necessarily mean the end of the legal road for offplan purchasers exposed to developer breach as identified above.

The question therefore remains....

where property has been returned to the Bank following developer insolvency, is it a requirement of the Bank who has taken over possession of that property, for debt to be recorded associated with all offplan deposited monies placed against that property and due for return to the offplan purchaser (according to Ley 57/68) following developer breach and contract cancellation? Are these outstanding debts recorded against the property that subsequently comes up for sale?

Question: Does a bank have the right to sell on a property where developer breach has been fully proven and the contract has been cancelled, BEFORE their outstanding debt to repay the deposits paid by the off plan purchaser has been fully discharged?

This message was last edited by ads on 06/07/2015.