09 Feb 2011 9:26 PM:
In the early nineties the UK property market was in trouble and many people had their homes repossed. Some banks were not too particularly worried as they had ensured that those borrows with small (or no) deposits had paid for indemnity insurance which covered the first 20% of the bank's loan should the bank reposses and then sell the property for less than the loan. The insurance (a one of premium payment) was paid for by the borrower (who in most case were unaware that they had paid this insurance) and the bank were paid (by the insurance company) if things went wrong.
The out-of-pocket insurer then waited. The deliquent borrower thought all was forgotten. When the economy improved the deliquent borrower went back into the property market - the insurance company still waited - but once they saw equity available from the deliquent borrower's new property the insurer went back to the deliquent borrower and demanded their money + interest. If it was less than six years since the original default then the borrower was in the dudu - if it was over six years they might have been able to wriggle out of it - (It all depended if they had acknowledged the debt in any of the intervening years).
The above scenario isnt that much different from the spanish bank pursuing the deliquent borrower with assets in the UK
Thread:
Spanish Banks invokes European Enforcement Order Against U.K. couple.
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