What Spanish Banks should offer every UK mortgage holder ( 2 x 1)

A bit of thought provoking these lazy last days of August?

(1) As properties mortgaged in 2004-on are heavily valued, heavily valued for auctions too..., (2) given Spanish banks are limited to value those properties when repossessing them today  for 50%-70% minimum of what their 2004-on inmense value-for auction is. (3) Being the case  (our experience of last 10 years says this) that in many cases, these limits are near the pending debt  ( auction value includes interests and legal costs);

I WONDER...

...would any bank in Spain will be able to offer those UK owners in Spain, paying crazy mortgage monthly instalments of those wild years, struggling heavily to meet them.... a settlement by which they keep paying same quota if first property is re-sold to them ( after Bank´s repossession) with another one  ( ond of those of their portfolio) for same mortgage quota?

Banks risk to have UK owners leaving mortgaged properties if they cannot keep their repayments which would result in more stress and expenses ( of every sort)  for them.

A  nice  ( limited offer ;)  Brexit 2x1 deal ?

Sounds kind of crazy, right?

That would also require a good deal by the Government on residency possibilities for UK property owners ( old and new) of course....

But is it not true that Banks need to download their portfolios? .....that Spain needs UK people to remain here?...... Is not that UK citizens would happily live in Spain if their mortgages allowed them?.......

Thought provoking indeed. Unfortunately as we all know common sense is not in the remit of the banks. Their stubborn determination to get  their 'pound of flesh'  has stagnated the Spanish property market for the past decade.

They appear to be a 'law unto themselves' and no Supreme Court or Banking Ombudsman seem able to budge them.

Thanks Sandra for your input. I understand your frustration but at the same time, am confident and see much progress in the social and judicial mentality towards stopping banking abuses ( it is just only started....much more to happen)

I fear it’s going to be a very hard and long process to effect sensible change, protecting buyers, Communities and owners.

Hello Sandra

Yes it seems the banks are either out of control or beyond control. You could also say the same about the Spanish legal profession. Both have supposed regulators (Bank of Spain and the Bar Association) but they seem to have a could not care less attitude. I have come to the conclusion that’s the way it is and it’s not going to change in our lifetime. I am not even sure Spanish nationals want change, they consider all this as normal.

Sheesh, you lot must being pulling my leg.  I've never noticed a Red Cross over the door of any banks so why do you think they should offer charity rather than protecting my deposits with them.  

This requires however a cautionary word, Maria....

Multiple property ownership comes with multiple outgoings ( not just mortgage outgoings ) which should never be under estimated, especially at times of economic or legal uncertainty, where rentals  for instance become threatened ( possibly required to sustain those outgoings where multiple properties are concerned) by changes in community law relating to majority voting. 

Or just as another instance the growing insecurity from town halls behaviour (non adherence to a constitutional court ruling by failing to implement directives for refunds associated with plus valia tax on properties sold at a loss)... not to mention bank’s ploys to delay payment of community debts associated with bank repossessions.

These and many other instances discussed in detail on EOS hardly inspire confidence.

There are still sadly, therefore, many legal insecurities in Spain that currently can act as disincentive to ownership, Maria. 

Which is exactly why the call for reform for greater protections and adherence to law, to closure of loopholes to counter lengthy and costly litigations, work hand in hand with incentive schemes as you have identified, and why cautionary educative messages become so vital in the interim.

I am not sure Spanish nationals are seeking any sort of reform. It is their country and most of us are only immigrants.
 

This message was last edited by angeleyes1 on 01/09/2019.

Perrypower:

Note it is a measure to protect current mortgage repayments. Note that Banks received a big help in the past.

Dear Maria,

I am confused.

How can this measure be deemed to protect current mortgage repayments when it could at the same time double the other outgoings connected with two properties and the associated risks?

Banks in some instances are already not paying their community debts upon repossession by not registering these properties in the land registry in the lengthy interim periods prior to sale, thus reneging on their obligations to pay off the relevant properties’ community debts and placing communities under stress in that process ( with some remaining community owners then having to meet increased fees to compensate for this non payment of Banks outstanding debts). Doesn’t that in itself question Banks motives with regard to using ploys to avoid timely payment of outstanding debts, not to mention that property details have been fully checked to afford legal certainty?

Under this measure and circumstance, who will have to meet the significant cost of registering the second property to gain ownership rights etc that are afforded a new owner? Who will pay for all the detailed checks to ensure the information recorded on the land registry which includes such elements as the boundaries of the property, its size and dimensions, ownership history and any outstanding charges that may be attached to it, which is an important additional source of legal security? Could this be a means of Banks passing on the registration costs and responsibilities to these mortgagees? 

Also if any of these detailed elements are subsequently proven to be questionable on the properties, doesn’t this then depend upon all due diligence from the lawyer to identify these essential details, and doesn’t that in itself depend upon all legal professionals to uphold all these due diligences? Without a trusted regulatory body that ensures such professionalism and knowledge is guaranteed by its members, doesn’t this measure then potentially place some mortgagees at increased risk?

And what of those mortgagees who are not aware that they may be denied the ability to rent out these second properties if a majority of community owners decide upon such rules under community law?

Perhaps I have misunderstood the additional costs and risks associated with this measure?

In many ocassions Banks are at present willing to offer  distressed properties ( those whose mortgages cannot be paid by current owners) to buyers by less than the principal amount of the mortgage on their properties. In some ocassions for much less.

Off loading estate is a hard and important task at present, for which they are not prepared, have no staff and which brings lots of costs to banks.... some of them, as you well said, are maintenance costs they are not meeting.

If they are willing to delete the initial mortgage debt by settlement --- repossessing these properties is costful, difficult and they are limited in the value they can give to them--- and sell the property to a third party for less than the attached debt....why not to incentive current owners this other way?

 I do understand Maria, but all owners taking up such an incentive must be fully informed of the associated ongoing costs relating to registering on the land registry in order to achieve ownership rights and the need to receive full details of the said property, plus they need to be fully advised of the risks and costs relating to community maintenance and potential restrictions to future rental opportunities according to community law, by their lawyer. All of this forms part of their due diligences doesn’t it? To encourage purchase/ ownership without providing full knowledge of the facts would be irresponsible would it not?

But sadly not all lawyers appear to be doing so, which is highly concerning when it comes to leaving mortgagees / purchasers vulnerable and financially compromised.

-Associated ongoing costs relating to registering on the land registry in order to achieve ownership rights What do you specifically refer to?

-and the need to receive full details of the said property,Of course.

-plus they need to be fully advised of the risks and costs relating to community maintenance what risks do you specifically mean?  

-and potential restrictions to future rental opportunities according to community law, Of course by their lawyer.

All of this forms part of their due diligences doesn’t it? Conveyancing lawyer needs to vertify that both the transaction and the future enjoyment of the property are safe, yes, of course.   To encourage purchase/ ownership without providing full knowledge of the facts would be irresponsible would it not?

Thanks Maria.

I refer to the costs related to registering a property on the land registry and any ongoing costs relating to all necessary searches and the like required to ensure all is above board with that said property. This could include an accompanying educative document to explain why this is essential ( i.e to be kept informed of all relevant property details and ongoing ownership rights).

I also refer to the need to identify all outstanding debts owed to the community as a whole, plus those outstanding debts associated with the individual property, prior to any agreement to purchase.  

As you reassuringly advise, all of the above and ALL transactions relating to future enjoyment of the property being safe ( such as changes to the ability to rent, new community project overheads, etc), is something that conveyancing lawyers and the Bar Associations could be addressing from within, which would go some way to standardise so that all due diligences are accounted for in the educative process relating to property purchase, plus it has the potential to regain trust that has sadly but understandably been brought into question to date. (Wherever possible this would need to be in concise non legal language for purchasers to comprehend however!)

Thank you for your willingness to listen and recognise failings and seek out fair workable solutions going forward.

This message was last edited by ads on 02/09/2019.