"Dación en pago"
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Can anyone shead some light on this matter.
I am not in negative equity and was wondering how easy it would be to hand the property back under this term.
Thanks in advance.
Stan
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This is basically handing over the keys back to the bank and signing a deed at the Notary by which the bank commits itself not to chase you for the debt and consider it discharged for good. The catch is that the property must not be in negative equity. This is more difficult than people think because due to the easy credit of the last years the Loan To Value of properties was really high, too high in fact, hence all the bank related problems we are reading with massive down writings. People borrowed far too much and now their properties may have fallen below their loan. If this happens the Lender will be very reluctant to agree to this "dación en pago" (hand back the keys to the Lender) because the collateral has few or no equity left.
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Lawbird Spanish Lawyers
http://www.lawbird.com
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Thanks for your reply.
So let's say I'm not in negative equity but I wanted to hand my property back under this term, how would I go about it.
Also does the bank have to allow me to do this is if I want or is it up to them?
Thanks in advance.
Stan
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You're welcome Stan.
It's the bank that decides not yourself I'm afraid. Propose it to them and see what they say.
The bank will evaluate if this is line with its best interests and will determine the amount of equity in the proeprty commanding an updated appraisal if neccessary. If the numbers stack up, they will accept it. You will both sign the deed at a Notary's and that will be the end of the matter. I advise you to hire a lawyer to make sure your debt will be totally discharged. The bank will now own the property having waived a lenghty and expensive court procedure (repossession).
This message was last edited by Lawbird on 10/29/2008.
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Lawbird Spanish Lawyers
http://www.lawbird.com
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Thanks again for coming back to me so fast!!
In your experience how likely will the bank take on this proposal?
I have tried to sell my property but due to the Spanish property slump I have been unsucsessful.
Due you have any idea at what percentage property has dropped in the Costa Blanca region?
Thanks again for your help.
Stan
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_______________________
Lawbird Spanish Lawyers
http://www.lawbird.com
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Talk to your bank. Tell them you cannot pay anymore and see what they say. If there is enough equity in the property then they may take it back but each case is different.
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Quite frankly m'dear, I don't give a damn!
www.herbalmarbella.com
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Yes, the best thing is to talk to the bank, maybe with the help of your lawyer, in order to see what kind of agreement is offered.
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Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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A very important thing to know is that the Bank cannot deny a dación en pago without proper justification and that if so, you can ask for judicial help.
This message was last edited by mariadecastro on 12/21/2008.
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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