GE Money have sold their mortgage book to OTAGAZ Gestion Hipotecaria

As the title. I have received an email from GE Money who we have had our mortgage with for the last 8 years. We were aware that things were not going well for their lending division and they haven't been offering mortgages for some time, but this has come as a bolt from the blue.

Has anyone on the forum had any dealings with OTAGAZ Gestion Hipotecaria? Having a Google of them, but there's nothing like a bit of first hand experience .

Mark

Mark

No experience of them, but nearly all mortgage documentation includes clauses which allow the original lender to sell the mortgage on. The new lender will normally have to honour the original terms & conditioins,unless there are clauses in your mortgage documentation to the contary. Hopefully you should see no difference.

Cheers

John

The most I have been able to find out is that they are a new company, incorporated on 11th Feb 2016 (http://www.infocif.es/ficha-empresa/otagaz-gestion-hipotecaria-sl) . I wonder if GE created a new company just to offload the mortgage debt?

Mark

Mark,

At the end of the day it's you who owes them, had it been the other way round I could understand your concern, if you honour your side of the contract you have nothing to worry about. I well recall our own UK mortgage with Standard Life Bank, that was bought out by Barclay's Bank and then transfered to their Woolwich division, all that actually changed was the name of the payee on our DDM. 

Would the selling on to another Bank be a problem if there were contentious illegal floor clauses in the original contract? Would rights be protected?

As John 777 says all the original terms and conditions are required to be honoured by any lender taking over a previous lender's mortgage book in exactly the same way as the UK. In an ideal world for borrowers all mortgage lenders would go belly up and all debts be cancelled but we know that isnt going to happen. As to the floor I am 99.9% certain that GE didn't apply this in the short period they were lending in Spain but in the event they did any new mortgage administrator would be subject to the same terms in law in that it has been deemed an unfair clause. 

I wasn't so much worried about changes to the conditions, just wondered if anyone had any dealings with the new company. I suppose GE have done the same sort of thing as the banks and created a "bad" side of their business so that they can leave the mortgage lending behind them (not that GE mortgage holders, me included, are necessarily a bad risk).

The staff member I have always dealt with has moved to the new company, so at least that is something positive 

Markfish, I have just seen this post. I actually work for OTAGAZ and before that I was with GE for 6 years.

The portfolio was simply sold on by GE to OTAGAZ who are now simply the bank and owners of your mortgage.

Only 4 members of the orginal GE team were kept on in Madrid and the one you are referring to always dealt with the non resident cases, she was the only one who was English.

GE simply wanted to leave their residential portfolio here in Spain so they put it up for sale. The sale was finalisied last December (2015). Originally they only had around 2,500 mortgages that were written between the periods of 2005 to 2008, all were self cert, 65% LTV mortgages which at the time were obviously high.

The default rate on the portfolio was high a few years ago simply because clients were either on 5 year, 8 year and 10 year interest only packages. Obviously the moment the loan switched from the interest only to capital the payments for the clients became high hence the defaults and the majority are in negative equity.

We are predicting the same for next year simpy due to the fact that the 8 year interest only periods are coming to an end. However we are very understanding and cooperate favourably with all borrowers looking for a solution to their non payment of mortgage and negatvie equity positions.

If you wish to contact me privately I am happy to go in to more detail or you can contact head office and they will divert you back into me.

Kind Regards

Senior Money not that it makes a lot of difference now but I think that you will find that the 65% Self Cert product was actually GMAC (marketed through Bank Inter) not GE. GE were offering an 80% full status product for non residents and no self certification. Both sold their books at the time of the financial crisis. As lenders of American origin I suspect that the original intention of both lenders was to securitise the loans and sell them on in a bond wrapper in the way that Salomon Brothers literally owned the US mortgage market in the 70s. What they hadn't counted on was the impending (and if I am honest inevitable, simply because prices were rising far too quickly) collapse of the housing market and thus the ensuing mortgage market collapse, nor the fact that prices were being driven more by the non resident market (a fickle beast at the best of times) than domestic. To be honest I doubt that their plan ever had legs simply because of the way that the Spanish mortgage market is structured and the Bank of Spain's control over the way that mortgages are distributed in Spain.   

Smiley, you are correct with GMAC and their portfolio, this was the first ever portfolio I worked on and to this day I am the consultant for Paratus AMC/Fortress who purchased the GMAC portfolio.

I have worked on this portfolio since 2008 and on the back of my work for Paratus I gained the consultancy role for GE Capital.

We purchased the book from GMAC in 2008 (14c/$1) and to this day I am still working on cases here in Malaga where we are now just been awarded the title due to clients not copperating.

I cannot tell you what the intentions of GMAC or GE were initiallly what I can tell you is that they were not traditional lenders, with high street offices. They got their fingers burnt and decided that the residential market in Spain was not what they wanted to be involved with and so they put their portfolios up for sale.

The orignal lending for both entities within the Spanish residential market was very small and they simply wanted to remove it from their balance sheet.

The banks are still sat on large amounts of NPLs and I am given portfolios to study on a regular basis for Paratus and Hispania.

GE (OTAGAZ) are simply managing performing cases and trying to limit the default cases by entering into an arrangement with the client.

Unfortunately the reality is that if you purchased property before 2008 (2002-2008) the chances are the property will be in negative equity and that will probably remain for the next 15 to 20 years and possibly beyond! 

I have seen numerous cases over the years since the crisis where mortgages on properties were at unbelievable levels and we have ended up selling the asset for 65% below mortgage. This is my main role.

Indeed I have had 3 cases come in over the last 7 days (GE Capital) and we are now working with the client to dispose of the asset at no cost to them and with zero liability relating to the short fall on the mortgage.

This is what the banks are off loading at the moment, however what we are seeing in the bidding process for the portfolios is that other funds are driving the price of the portfolios up to a point where their are no margins and going north of 50 cents in the dollar.

I rather think that both GMAC and GE entered the market here without enough research or understanding as to how mortgages worked in Spain. Especially when it came to the completion day at Notary and the fact that monies weren't transferred electronically with a simultaneous completion. GE (I think) were trying to complete with funds transfer and GMAC we having to use a correspondent bank (Deutsche) to issue the bank drafts.......

As to the negative equity issue I 100% concur that it is a problem that is going to run for a very long time yet (in spite of all the supposedly positive statistics about recovery and estate agents talking the market up). There is still somewhere in the region of 3.5 Bln in toxic debt (I BELIEVE) held by the banks and when you consider that the Spanish real estate market is so dependent on overseas buyers (specifically in the more coastal regions) especially British and Irish it is going to be a long time before confidence levels in their domestic economies return to the levels they were to create a bouyant and sustainable market again. 

Our long standing resident solicitor (Maria) has stated in another thread (https://www.eyeonspain.com/forums/posts-long-23056.aspx) that mortgage holders should have been given the opprtunity to purchase the mortgage debt at the same price as it was sold to any 3rd party (if I read it correctly).  Not that we can afford to do this, but as interest only ends this December and repayment will become sky high, is this an option that should have been given to us?

Mark

Yes, you do have rights for the purchase of that debt.

Was this notified to you? How was it?

We were told about the change a couple of weeks before it happened. I can't remember the exact wording, but one month the direct debit was GE Money, the next Otagaz.

No problems so far, but that could all change come the end of the year.

Mark

How was this notified to you? In an email?

Yes, email only.

A revision of the wording would be necessary for me to advise you on possibilities of challenging it and ask for a preferential acquisition right. Not easy matter but possible of course.

I don't have a copy of the email unfortunately. I lost a lot of my Spanish documents when my hard drive failed and it (stupidly) wasn't backed up. Also, unfortunately, the employee hasn't contributed to the thread, although maybe during the week when they are open for business again they may pop in.

Mark

Hi,

New member. I had a mortgage with GE for a Portuguese property which was transferred to GE Spain. I have had no correspondence in regards to my mortgage being moved again. Can anyone help?

Thanks

I have an email contact, but I don't want to put it on a public forum as she may be overwhelmed . Not sure you are able to access pm's yet, but will send one for when you are able to.

Mark