Dacion en Pago Query!!

Hi there

I have posted this in legal and spanish banks catergories so apoloisies for this but need to get as much advice ASAP.

We recently completed a Dacion en Pago in March and have still been having letters from the mortgage company which are advising us we are over drawn etc etc.  We have had confirmation via e mail in May from the bank manager that we were in peace with them!

However following numerous letters since i have  emailed them a letter asking for them to confirm the current situation as we are very concerned. The response today was as follows:-

As you can understand these letters are not coming from the Branch in Campoamor, they're automatically generated in Madrid. You left the power of attorney and the keys of the property, but it does not mean that the property is sold and the mortgage is already cancelled. I understand you're concerned for the letter you receive but it takes time to get out from this situation. We're not calling or sending you lawyers to require payments, because we accepted to try to sell it before it went repossessed, you know how is the economic situation all around Europe, it's not easy to find buyers, you have to be patient. And always bear in mind that the decision to buy the property and sign the mortgage has been taken by yourself, you have to be ready to accept the consequences.

I thought a dacion en pago cut you free of the mortgage and any debt??

Can anybody shed some more light on my sitaution and/or provide me with any advice??

Just to add our mortgage monthly payments have stopped!!

Many Thanks in advance.

Dacion en Pago effectively means you have the right to return the keys to the mortgage lender in order to stop repossession proceedings. However the liability on the bank is only to discharge the debt to the value of what they can sell the property for. EG - if the mortgage is 250,000€ but the bank can only sell the property for 150,000€ then there is still technically a liability of 100,000€ encumbent on you. Assuming you are non resident it will then depend on whether they decide it is worth taking you to court in country of residence to recover the debt plus any charges incurred. In a bouyant property market this is very rarely seen - those that do opt for dacion en pago can normally be assured that a property will achieve the debt outstanding and possibly more but in a market such as we have at the moment the opposite is usually the case. 

If it was simply the case that all liability simply stopped when handing the keys back almost everyone in Spain that has bought property in the last 3 years would probably be considering it - taking that a stage further assume that most mortgages taken out in the last three years would be 30% above achievable realistic sale prices today and the banks expected to suffer that burden of debt simply writing it off regardless then the Spanish banking system would go into meltdown and there would be a collapse of the primary banking system in Spain.

Pazaz:

I would certainly need to see the deed/contract you signed with the Bank for the dacion en pago.  Your position certainly depends mainly on this. Initially the ideal deal is to have a clause in the agreenment ( deed or contract) by which the Bank/lender refuses to further requests in the future regarding that mortgage.

If the valuation of the property by the Bank do not cover the whole value of the remaining debt, you  have got rights to your own valuation and to challenge that of the Bank ( for a full coverage of your debt, with your own valuation at hand) in Courts.

In many occassiona as Banks/lenders do not want to accept your RIGHT to dacion en pago, they show a very low valuation, of course made by a surveyor of THEIR election.

The right to give the house to the lender as payment of your debt is a clear right in our Civil Code, so... so not let Banks/lenders to impose anything on you, come on Banks!

Maria

Thanks for all you replies.

We had the propery valued by somebody the bank recommended before we requested a daciaon en pago. It was valued at 178,000.00 Euros with the Mortgage being 128,000.00 Euros.

I have a copy of what our joint owners had given at the Notary which is obviously in Spanish. I will have to get this translated I guess to check the content..  Something we obviously should have done soon as they come back from  signing what we thought was the dacio en pago!

Anybody any ideas of where we can get this translated?

What is the best course of action here to establish:-

A. what we have actually signed and if not a dacion en pago

B.  pursue achieving a dacion en pago (if we havent already  signed for one) before its too late and the property possibly gets re-possesed.

Is there a way of checking the title to check if its in the banks name or ours?

Many Thanks

Is there a way of checking the title to check if its in the banks name or ours?

Yes, if you know the plot registration number and location/ Land Registry it is registered in.

You can use this online service to these effects: https://www.registradores.org/registroVirtual/init.do

Please keep us posted.

Best regards,

Maria L. de Castro

Thanks Maria

Anybody got any guidance or tips on how to use this web site?

Many Thanks

I cant for the life of me work out on  web site kindly posted by Maria in her previous post,  if the property title is in my name or the Banks??

Anybody able to point to the correct page of this web site?

Many Thanks