02 Jul 2012 8:07 AM:

it is possible to get a dacion even where you are in negative equity, because we have done it. We had a 100%  35 year mortgage and all the usual initial problems - builders electricity, no first occupation licence etc: which took years to sort out .

You need to get good lawyers - we used Costa Luz  who were exceptionally good - and of course you need to have a bank prepared to talk. Our mortgage was with Caixa Galicia, now NovaCaixa.  Following on a point made earlier you must start negotiating with the bank itself when you are still regarded as a customer in difficulties, not a defaulter. I don't know what happens once your case goes to their lawyers but I suspect the outcome might have been different.

Our bank was, in retrospect, reasonable. They re-valued the property,  which showed our house to have fallen in value by 35% from their initial valuation, which was obviously inflated to allow them to give us the size of mortgage they did. Their new valuation was probably a fair one and higher - much higher-  than we would have got in a forced sale. 

This still left a sizeable gap between the current value and the outstanding mortgage and we negotiated a deal which effectively split the difference. This was far from painless but represented only just over 2 years of mortgage payments. When the alternative was paying for another 30 years towards a constantly depreciating asset. it seemed a no brainer.

I should add that we completed our negotiations a year ago, and things may have changed. However  banks generally have never been so unpopular - perhaps even more in Spain than the UK . This, along with recent court judgements, and the fact that they are all receiving, or are about to receive, huge taxpayer bailouts makes it very difficult for them to retain the moral high ground. After all I have taken my loss on the chin, with no one offering to bail me out!

 

 

 

 

 

Thread: Chasing mortgage debt in the UK

--------------------------------------

21 Mar 2011 11:16 AM:

I find it interesting that those on this thread following the line that we are all responsible for our mistakes don't seem to be highlighting the double standards being applied to institutions such as banks that are regarded as "too big to fail" and are then bailed out with huge amounts of public money and the "little people" like ourselves who are quite relentlessly punished for our mistakes.

The bank with whom I have my mortgage has been merged with another Caja and is, I understand, in receipt of massive capital injections from the Spanish central bank. Its responsibilities in the transaction that allowed me a 110% mortgage ( yes they were available and without any financial checks being done on my creditworthiness) on a property that was clearly with hindsight overvalued even before the slump, have essentially been forgiven. As I struggle to keep up my mortgage repayments on a property worth perhaps 50-60% of what I paid for it and unlettable at any level that will cover more than 50% of my mortgage payments I haven't noticed any forgiveness on the bank's part. 

Put simply both the bank and I were irresponsible when I took out my mortgage. I could argue that the bank was even more irresponsible in that it knew the market better than I did. Only one of us seems to be paying the price.

Thread: Chasing mortgage debt in the UK

--------------------------------------