# Bank repossessing our home?



## barneysmum (Apr 30, 2008)

We are having problems paying our Spanish mortgage. We approached the bank in October last year and they explained we could not pay for 3 months and then we would have to start paying again. They would not change the type of mortgage we have from repayment to interest only.

Now, we are still having financial problems and basically cannot afford the monthly payment - we have written to them to ask what happens if we give the keys back, and that we do not want this to happen, and have said we could afford, say €1000 a month for the forseeable future.

They didn't reply for almost 4 weeks and now they have they are sticking to what they first said which is basically that they are not flexible and we either pay the full monthly amount, or they repossess the house.

I thought banks had to do what they could to help - to give payment breaks, to offer a change in terms, to take reduced payments...or is this not the case in Spain, is it written down anywhere?

This is not a holiday home, I live in it with my 2 children and naturally am now worried sick that we will end up homeless because of some stubborn and inflexible bank. It's Banco de Valencia.


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## jojo (Sep 20, 2007)

barneysmum said:


> We are having problems paying our Spanish mortgage. We approached the bank in October last year and they explained we could not pay for 3 months and then we would have to start paying again. They would not change the type of mortgage we have from repayment to interest only.
> 
> Now, we are still having financial problems and basically cannot afford the monthly payment - we have written to them to ask what happens if we give the keys back, and that we do not want this to happen, and have said we could afford, say €1000 a month for the forseeable future.
> 
> ...


I'm so sorry this is happening. I guess the best thing you can do is to formulate a plan that you can stick to and go to the bank - with a translater if necessary and plead your case - hopefully they will see that you've worked finances out and will be happy to try. I'm assuming that like the banks in the UK, if you keep in contact with them, appear to be in control and make every effort to pay them, then they will give a little. Banks tend to get "stroppy" if they dont know whats going on and no one bothers to tell them - otherwise, I dont know what you can do. Again I'm really sorry and feel for you

Jo


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## barneysmum (Apr 30, 2008)

jojo said:


> I'm so sorry this is happening. I guess the best thing you can do is to formulate a plan that you can stick to and go to the bank - with a translater if necessary and plead your case - hopefully they will see that you've worked finances out and will be happy to try. I'm assuming that like the banks in the UK, if you keep in contact with them, appear to be in control and make every effort to pay them, then they will give a little. Banks tend to get "stroppy" if they dont know whats going on and no one bothers to tell them - otherwise, I dont know what you can do. Again I'm really sorry and feel for you
> 
> Jo


Hi,

Thank you for the quick reply! We have done all this. We've communicated from the start and sent a detailed email 4 weeks ago of our situation with suggestions of what we can afford to pay. The manager speaks fluent English so that isn't a problem. The problem is they are just refusing to help in any way - we pay the full amount or we lose the house, and I can't believe they would rather have yet another house on their hands rather than a plan to at least pay something.


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## jojo (Sep 20, 2007)

barneysmum said:


> Hi,
> 
> Thank you for the quick reply! We have done all this. We've communicated from the start and sent a detailed email 4 weeks ago of our situation with suggestions of what we can afford to pay. The manager speaks fluent English so that isn't a problem. The problem is they are just refusing to help in any way - we pay the full amount or we lose the house, and I can't believe they would rather have yet another house on their hands rather than a plan to at least pay something.


I dont believe they would either, I think a proper visit by appointment would be in order??? Maybe you could talk to a lawyer or at least a gestor and if they think it would help they could go with you. I really dont have any experience with Spanish banks, but I would have thought they all have similar thought processes. I do know how it is/was in UK banks and I've known people to carry on for years on "a wing and a prayer" The key is to look like you are in control of your finances and make them good offers of payment.

See what some of the others on here think??

Jo


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## chris(madrid) (Mar 23, 2008)

Oh dear. I've been wondering when we'd start to see this. 

My experience of Spanish banks (as a customer and also a supplier) - esp the regional ones is that they can be resolutely inflexible even to the extent of losing business. I'm currently "explaining" this to one of Spains bigger "Cajas". 

I would suggest you go FAST to the Social Security and see if they can intervene in any way. I'd be surprised if a bank would risk a confrontation with INSS - especially where children are involved. And a lawyer may be your last resort - I doubt a gestor will be of much use here.

If you're self employed you can maybe find a loan from ICO. 

What is the debt/equity ratio like?. No please don't post it here - but this maybe a factor. Maybe they feel that they can easily sell your property to recuperate their funds. Nonetheless if it comes to this - get a lawyer.

I was talking with my bank manager about this issue last week - he is paranoid that his "higher up the chain" managers are going to force him into starting foreclosures.


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## Stravinsky (Aug 12, 2007)

One thing I would say ...... dont just go into the bank and hand your keys in if things get completely desparate. They could sell the house for a knock down figure and then come after you for the balance up to your mortgage

It is called a dacion en pago. The bank do a valuation on the property and if you have equity in the property then you go to the notary hand the keys over and any debt is written off and your liability is over

If the bank valuation leaves you with negative equity then the dacion en pago cant be done and you have to go down the reposession route where the difference between the outstanding loan amount and the sale of the property is yours.

What effect that would have on you I dont know, but I cant imagine trhe banks want to be left with loads of properties that they cant sell!


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## SteveHall (Oct 17, 2008)

I am currently being offered five hundred repossesions per week by JUST the CAM!!! 

There is IMHO a HUGE problem under Spanish law. The banks ONLY have a responsibility to themselves - I was involved in a case where the mortgagee was in arrears on a 1,9 million house. The bank were only owed 900k but were threatening foreclosure and advised that if they got 900K + expenses/charges/fees/disbursements etc they would be happy. In other words the mortgagee could have lost his entire 1 million equity!! In the end it was sold in a distress sale at 1,3 million. 

You MUST get to the bank and fast and deal FACE TO FACE. You must get them to agree a repayment schedule and then you MUST stick to it. If not, then you WILL lose your house. 

It sounds tough but you made a deal with them and you have a responsibility to pay it. I am not saying that the lax UK system is right or wrong. All I am saying is that the Spanish system IS tougher. 

I wish you every success.


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## chris(madrid) (Mar 23, 2008)

SteveHall said:


> There is IMHO a HUGE problem under Spanish law. The banks ONLY have a responsibility to themselves


 And their shareholders! - who at the moment are BRAYING for results.


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## SteveHall (Oct 17, 2008)

...INDEED!!! 

In the case of the BdV that means me!


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## barneysmum (Apr 30, 2008)

Stravinsky said:


> One thing I would say ...... dont just go into the bank and hand your keys in if things get completely desparate. They could sell the house for a knock down figure and then come after you for the balance up to your mortgage
> 
> It is called a dacion en pago. The bank do a valuation on the property and if you have equity in the property then you go to the notary hand the keys over and any debt is written off and your liability is over
> 
> ...


I'm pretty sure we have some equity in it. We asked the bank to do a valuation over 4 weeks ago but had no reply. I am going in on Monday to speak to the manager. Thanks for all the replies.


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## SteveHall (Oct 17, 2008)

barneysmum said:


> I'm pretty sure we have some equity in it. We asked the bank to do a valuation over 4 weeks ago but had no reply. I am going in on Monday to speak to the manager. Thanks for all the replies.


Again, with wishing to be too blunt. 

1) You have a problem 

2) "We asked the bank to do a valuation over 4 weeks ago but had no reply."
You do NOT have 4 weeks to waste. IAC what good is a bank valuation? Are you in a position to pay them for it? What is it going to prove other than that your hime is now worth probbaly 30% less than it was 18 months ago?

3) Go there on Monday as you have said and say that you expect a firm answer from them by Wednesday.

It's your life you are "playing with" at the moment.


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## crookesey (May 22, 2008)

Barneysmum,

This is a terrible state of affairs that you find yourselves in, I really feel for you. You have had a lot of advice that I urge you to take on board.

You sound like a youngish couple (albeit that everyone sounds young to me) what with the kids and all, have you approached your respective families for help? Do you have anything back in the UK that you could turn into cash? such as an unmatured insurance policy, a childrens policy etc; Are either of you named as beneficiaries in anyones wills? If so they might just feel that now is the time to help you.

Obviously something has gone wrong work wise, could Barneysdad get work back in the UK to ease the cash flow problem? Conversely Barneysmum is currently minding her own children, is there scope for her to mind someone elses kids in addition for pay?

Just ideas, I am sure that you have covered these things, good luck.


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## mtismee (Dec 10, 2007)

*Equity release?*



barneysmum said:


> I'm pretty sure we have some equity in it. We asked the bank to do a valuation over 4 weeks ago but had no reply. I am going in on Monday to speak to the manager. Thanks for all the replies.


 It is possible to take equity release from various companys offering this -providing you are over 55 - the older you are the more you get. 

The system allows you to have the house purchased and the balance of your mortgage paid off. 

You have no further payments to make and you live in the house free of mortgage.

The property is sold when you die and the residue is paid onto your relatives whom you indicate in your will.

They usually state no negative equity to be paid if the house is being sold for less.

Example if your say 69 and your property is worth say 280,000. you will get about 83,000 cash. They then pay off any outstanding mortgage and you have the balance.

As you see the money is small but you do not pay a mortgage and when your both dead...not one person ........only then is the property redeemed after 12 months.

This allows any relatives time to dispose of the property should they wish.

To me it is a way out ...as you cannot take it with you..so why hang on when you will have no say anyway. Live Now

[email protected]


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## mcginlay (Dec 10, 2008)

*House problem*

I think Steve has summed it all up perfectly. I think the fact they have given you three months grace without paying is a major help. Many of the UK banks wouldn't consider such leeway at the moment. Don't get too much into the mindset of " they won't want another property on their hands if we can pay something". Banks generally don't think in this way particularly if there is some equity in the property. Lets say you have a mortgage of 100k and the house is worth 125 k. They know that they can pretty much recoup all of their money and reduce their liability to 0.

Unless you can show that your sitauation will change, they are unlikely to back down. However - your children and your husband are the important factors here and although time is against you try not to panic.

The bank - if they are not going to back down - may give you some time to sell the property on your own back so that you can at least recoup some of your equity. If you only have a small amount of equity you are unlikely to get much extra at the moment but if you have say 50k leeway you could come out with few quid.

At very worst you are looking at the banking taking the house but then you have the option of renting somewhere cheaper, having a roof over the kids head and the security of knowing you don't have the bank snapping at your heel and affecting your sanity and mental health. It is an extremely stressful situation but please put your children first in all cases and don't get into a position where you are financially even worse off.

A face to face meeting might help particularly with a fluent English speaker and I think using the services of a qualified professional will be invaluable if you can afford it.

Too many people feel as though it is the end of the world and at the moment it may feel like it but a solution will appear I am sure. It may not be the solution you want ideally but at least you will have security of knowing you can comfortably buy clothes, food etc for the children. 

This is just my opinion and obviously I have no financial expertise. I hate seeing people in this situation and wish you the very best of luck whatever happens.


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## Suenneil (Feb 17, 2009)

Hi ... not sure if this has been sorted or not as the original post was a while ago now - I will keep my fingers crossed some resolution was found.

In case not .... I work for a Law firm here and we get more and more calls each week on this issue - be very careful, we have friends / clients who have had their banks agree to Dacion de pago and left with no debt - others who have just walked away after getting nowhere with the lender and are now being chased for the debts (and they can follow you to the UK now).

This is a new area for the Spanish banks in many respects, with the sheer volume of defaulters - so they themselves have no real consistent approach to it either.

Also bear in mind you cannot go down the dacion route if you are in arrears.

Getting a lawyer involved for the negotiations etc can be a good thing (Im not saying that because I work for one!) - but obviously there are fees to pay for that and you may not be in a position to dish out more money.

But take advice - and keep in touch with the lender as much as you can, also record all emails / letters / telephone calls, even email the detail of any telephone calls to them after the event - just to prove you have been trying.

You can pm me in you need anything on the legal side and I´ll put you in touch with someone.

Good luck.


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