Repurchase / repossession - advice needed

Our monthly repayments on our interest only mortgage taken out with Halifax and now with Sabadell Bank, via Inside Track has jumped from 122 Euros to 1770 Euros per month.  We were not notified of this and despite several requests for the mortgage agreement nothing has been forthcoming. The explanation for the massive increase is so that we pay off the capital by the end of the term.

We have been contacted by Costaluz lawyers - found through Eye on Spain - who suggest we implement repurchase proceedings.  This appears to be credible but I wonder if any other owners have tried this route and been successful.  We are very tempted but it is not cheap.  My husband and I are both retired now and having been duped into this investment remain concerned that we may not be able to sustain these payments.

Any comment / advice / guidance greatfully received.

Kath Carmody

Carmody:

Please clarify it was you who contacted us first for legal advise. It is not our style to chase possible clients without previous interest by them. Just if they state they are seeking legal need for an specific matter we can help with, we contact them through Private messages in this forum.

Having said that, with best of the moods, as explained to you today in an email, this possibility--- fully based in Law-- is being newly explored by us, but legal basis of this is well known already and there are some other lawyers in Spain using it to fight consumers rights in these sales of  mortgage loan contracts to vulture funds. As a matter of fact, the clause which allowed banks to transfer these contracts without previous consent of teh debtor has been declared null by our Supreme Court.

Of course, you need to check and be sure of the procedure and its possible risks. We also explained this to you today

Please, take your time and decide with full freedom 

Is this a situation where mortgagees who took out interest only mortgages are now struggling with negative equity where the current value of their property fails to meet the outstanding amount of monies owed on their property, and the new owners of that mortgage debt ( vulture funders) are now demanding ( without adequate consultation and opportunity to re-evaluate options available to mortgagees) are placing mortgagees under great risk/ stress with sudden excessive  increases on mortgage repayments, thus trying to force the mortgagee into a repossession scenario, when from the outset of this " unbeknown" transfer of mortgage contracts ( from the banks) the vulture funders failed to meet their legal responsibilities to inform mortgagees, let alone seek consent for the transfer of these contracts from the mortgagees themselves?

And in that process when taking repossession of properties it transpires neither have the vulture funders ( or Banks) registered their transfer of "ownership" or been required to inform community administrators, preferring to remain anonymous within the existing system, and not meet their obligations to pay ongoing management fees to the communities ( debts owed by Banks to communities currently running in excess of 380 million euros!)

Without mandatory requirements in place to enforce such legal obligations on Banks and Vulture Funders at point of transfer, the existing system will sadly remain open to abuse and will continue to leave ALL community owners at risk.

Surely any system with loopholes of this nature and open to abuse in this manner is not acceptable in this day and age, and needs to be urgently reassessed? To place mortgagees and communities at risk of ever increasing litigation routes to achieve justice rather than review mandatory solutions at point of transfer appears wrong does it not? Plus it will place even greater pressure on the justice system currently under resourced and struggling to meet rule of law  criteria which requires adequate resourcing and provision of timely justice.

Excellent post ads.

Banks will always have priority over justice, it’s the corrupt culture of the world and those in power who benefit from it.

What remains important here is that everyone affected by these compromising circumstances, communities and mortgagees alike, bring this to the attention of both the EU ( via MEPs), the Bank of Spain ( via complaints procedures) and Spanish Govt through official channels intended to monitor such abuses, so that Banks and Vulture funders are made accountable, so that they can't continue to play the system and in that process flood the justice system and compromise the rule of law.

The Banks in Spain ( and Vulture funders) are undermining people's trust and if not careful they will continue to undermine the real estate and judicial systems in Spain.

It shouldn't have to be this way.

This message was last edited by ads on 22/09/2017.

Hello ads

I admire your spirit, but

‘’bring this to the attention of both the EU ( via MEPs), the Bank of Spain ( via complaints procedures) and Spanish Govt through official channels intended to monitor such abuses’’

Do you actually believe that they do not already fully know what’s going on?. Is it all being kept a secret from them?.

If this is put in writing via the procedures intended to monitor and protect then they will not be in a position to deny knowledge of these abuses and given the emphasis being currently placed on safeguarding the rule of law.... 

it sounds like the original posters interest only mortgage period has come to a end.....and the mortgage company have restructured the mortgage to a repayment mortgage ...if so it is normal for the payments to increase ... the mortgage company will require payment in full by the end of the restructured term...interest only mortgages are normally over 5/7/10 years unless otherwise stated..if you do not change over to a repayment mortgage before the end of your agreement you will be expected to pay in full at the end of your term ...or take a repayment mortgage out for the full outstanding amount ...most people that take interest only mortgages out usually have a large insurance policy in place that matures at the end of the mortgage term ...to cover the outstanding dept... interest only mortgages are normally only offered to young first time buyers ...it may well be that you have been misled ...and not given the correct advice go and speak to a lawyer ..but at the end of the day the mortgage company is going to demand payment in full ....or the property back to cover the outstanding dept.
This message was last edited by windtalker on 23/09/2017.

The key point being correctly advised both from the outset and forewarning of upcoming options well in advance of maturity and not defaulting to repossession etc without all legal requirements being met.

Plus there is no excuse for Banks playing the system and compromising communities to the tune of 380 million euros. 

These loopholes wherever they exist in the system need reporting and plugging rather than always having to resort to legal action AFTER THE EVENT.

The Bank of Spain need to step up to the mark and regulate appropriately and take all measures to reassure their customers and ensure compliance across the board.

Only via these reporting mechanisms in place to protect being consistently used by legal teams and community administrators alike will sufficient pressure ever be applied to resolve these ongoing issues.

This message was last edited by ads on 23/09/2017.

This message was last edited by ads on 23/09/2017.

This message was last edited by ads on 23/09/2017.

I thought the financial institutions were working to the same basic consumer principles across Europe?

Just reflecting on two mortgage products we have, the closest one to this scenario would be the Northern Rock one, which was taken over by the government after a run on the bank and split into two (we were placed in NRAM).  This has since been bought by an american company, who have taken on both the risk and any equity in payments.

The other is one interest only mortgage with the Bank of Ireland.

Both have been restructered or bought out but in none of these cases were they allowed to change the product or interest rate set at the time the mortgage was taken out.

Im a bit surprised that any 'vulture funding; takes place in a regulated mortgage?

As ADS says, any changes are part ot the key facts of a mortgage and must be signposted and delivered in a fair and accurate way, otherwise whats the point?   The vulture ends up with no income and potentially a property falling into disrepair that can't easily be sold?   Seems pretty pointless to me.

You are quite correct Brian

But sometimes vulture funding financial institutes have to take on some of these mortgages as part of the package they buy.

Ads: yes, you described below a very commun situation. How good is to have your clear mind in this forum!

Registration of acquisition of properties after repossession by these funds or transferees are being also obstacled by General Direction of Registrys and Notaries  as theiyare not the Land Registry holders of mortgage repossesion rights ( being these, the original lenders).

Another interesting point is that many funds have been anticipated  liquidated and therefore, you can be paying for a debt that it actually does not exist anymore.

Many thanks Maria.

Could you please provide a more detailed example to further clarify your last point with regard to paying for a debt that does not exist anymore as I am a little confused on this.

Kind regards.

I know very little about these things, but I find it very interesting & I'm naturally curious. Clearly there are other members with a great deal of knowledge / experience in this area, so maybe they can explain some more. What a shame the OP hasn't posted again yet, or offered any additional info. A quick Google of Inside Track suggests that they went into administration around 10 years ago, so is it safe to assume that the OP's interest only mortgage dates back to then? What would the loan-to-value have been? Is there any equity in the property? Is it their principal home, or has the property been rented out? If there's any equity, and they have lived in it for €122 a month for 10 years (you couldn't rent a shoebox for that), why not sell it to pay off the principal and move on? Or if they can't sell / have no equity, just hand the keys in to the bank? If it's been rented out (weren't Inside Track in the business of encouraging buy-to-let?) is it fair to assume that with interest only payments of €122 a month, they've made a fair profit over that time? If so, again why not just sell the property or walk away? Again, not understanding anything really about these things and certainly not wanting to offend anyone - but how is it possible that it comes as a surprise to anyone that at some point the original capital loan has to be repaid? Have I missed something here? 

Carmody - a few responses to the gratefully received comments and especially for Roberto.

Firstly we can count on one hand the number of weeks the property has been let - depite a rental gurantee scheme set up by Inside Track.  Our intention was to overpay using the rental income so that when the end of term was reached the capital would be minimal.

The property is seriously in negative equity if indeed there will be any interest in it.  If is only that the interest rate has been so low that we have managed to maintain our payment. 

It is the fact that the bank have increased our monthly payments to 1770 Euros per month without any discussion or notice which has started our quest for a solution - hence we contacted Costaluz lawyers to see if we would qualify for the service.

Many thanks for all of the comments

 Many funds were liquidated in anticipation along the crisis. The European Central Bank reduced the solvency criteria of the assets it was admitting as long as crisis get harder. 

Kath, thanks for replying, although I still feel that this thread is likely to produce more questions than answers. Surely if there was a rental guarantee scheme that failed to deliver, there's a breach of contract there somewhere? Presumably that would go nowhere though, since I'm guessing Inside Track are somewhat tricky to "track" down? But how long have you had the property, and how long has it been apparent that your original plan (which seemed sound enough) wasn't going to work out? What contingency plan did you have? Have youever tried renting it out through other channels? Or is this property in not such a good location? Would it be best just to let the lender take it back? Is this in fact what you were originally asking about? (repurchase?) As for the sudden, unexpected & huge increase in payment demands (from Sabadell?) like Brian I'm a bit surprised (although being a Sabadell customer myself, not totally) that this could have come completely out of the blue. I'm trying to tread carefully here, because I don't want to offend and I feel your pain, but I can imagine others may be following this with interest (no pun intended) and as I said before, I'm genuinely curious.

Ads, from your posts I'm thinking that maybe you've also been a victim of some sort of misselling? Unfortunately, although it appears to me that you have vast knowledge on the subject, your posts could surely win a gold medal at the Olympics for longest sentence structure known to mankind, and I can't make head nor tail of them. They don't appear to actually be adressing the OP's immediate problem (I know, neither are mine!)

I say this with more than a little trepidation, but for once, I actually find that Windtalker's posts are the only ones here that make any sense to me at all.

Probably not known at the time but the person that set up Inside Track, it seems he was only in it for the money...Other peoples money, which considering the many failures he's had that worked.

Hate to say this and the truth really does hurt...But...due to the low rate of payback folk got taken in, made no effort to pay the loan back, relied on the house price going up, had no back up for when these loans ended.

Of course they would tell you that the property would rent out for X amount of Pounds / Euro's, if they said it wont rent out who would invest.

I get the feeling that this company was to be the only one that would lend this way, to late now, but maybe this should have set the alarm bells ringing in the first place.

I know a couple of people that have done this on UK property, they also got fingers burnt.

I am not sure we are getting the true and full story here. The OP looks like they are trying to blame anyone but themselves for the position they are in.

Why did they take out an interest only mortgage?.

How did they plan to discharge the mortgage debt at the end of the mortgage term?.

What is this mystery investment they say they were duped into?

When was the mortgage taken out? Why has it taken until now for the penny to drop that they cannot discharge the mortgage debt?.