Bank Repossessions in Spain explained

Great post from Maria..

It is intresting to remark that the power to decide if  a house can be given back to lender-bank or not as payment of the mortgage debt  is not the Bank´s,  as the denial needs to be justified and if not... the debtor can deliver the keys to the Judge. There are different ways to impose Law on the Banks here.. it is not always their will which reign.

Hi Growler i am a great believer in solutions not problems as well - nevertheless with the bureaucratic system the way it is here I think it is probable we will have been through two more cycles of rising and falling markets before the Spanish view this (or anything similar) as their get out of gaol. It will require a right minded govt with an eye on capitalism to introduce legislation that will enhance the protective status for Landlords (much as Maggie T did in the early 80s) to deliver empty stock to the rental market - you also have to remember that a massive percentage of the empty stock (and possible problems with mortgage payments - especially in forums such as this) is going to be holiday homes in resort orientated areas - thus the problem that there is a shortage of employment in those areas -- this is just as true on the Costa del Sol as anywhere else on the coast - and believe me it is probably better in this part of Spain than any other. There is no incentive for industry to establish business here and in a market such as we are experiencing now with car manufacturers, construction companies etc etc all suffering as a result of credit squeeze that situation is not likely to get better - most companies looking to shed cost rather than in expansionary mode - thus no work, no labour force needed - why bother incentivising Landlords? Sorry thats a bit garbled but hopefully you will get my drift.

A change to Interest only wouldn't really help us at the present moment in time (and in the forseeable future - unless British Banks stop playing silly beggars and I can earn some money!!!), so to repeat a previously placed post;

We have a mortgage on our flat in Benalmadena. I am thinking of chucking the keys in to the Bank. Priority is to make sure my family is ok in the UK, not on a "luxury" item such as an overseas property. Reality is I can't afford to pay for Spain and am not going to jeopardise my family in trying anymore. Any loss i make will be bearable as was only equity in UK house prices, so paper loss (how I'm having to view it!).

Bank Manager wasn't too happy with the prospect of me giving him the keys when i saw him October - shocked and flummoxed i think, as don't think many people present him with this option!!

Now this is a serious situation / stage, can anyone advise on the process if I was to walk away? Can i be got at in the UK by Banks / Lawyers etc? Am not fussed with being in trouble in Spain to be honest, just want rid of this.

Your help would be much apreciated.

Under provision 1175 and following of the Civil Code, you have got the right to pay your debt "in kind" ( give keys back to the Bank in your case), they need to justify if they did not accept it and you could challenge that opposition in Courts.

Of course, you have got every right to protect you and your family against banks´ voracity

I believe now that banks in Spain have the right to pursue you in country of origin if the property has to be sold for less than outstanding mortgage debt. Quite how the process would be followed is anyones guess as this is very new territory and the EU legislation quite recent. In practicality whether they would or not is another matter - I think a great deal will depend on the lender and what links they have with the UK. If it is a bank that has a strong UK presence then it will be a great deal easier as they will have a legal team there already if it is a bank without a UK presence they may simply let it go. I do know of one lender that is currently in discussion with their UK arm about a specific department based in the UK to deal with British defaulters on Spanish mortgages.

Bank is Caja Madrid and don't think they have any ties to the UK. In a bit of a sticky one here, but thanks for your help.

NO UK presence as such so you should be ok - a lot will depend on the number of defaulters they encounter and whether it becomes worth them setting up some kind of local legal team in the UK - it would be a nightmare them trying to do it from Spain.