Spanish Banks invokes European Enforcement Order Against U.K. couple.

As Victor Melldrew would Say " I can't believe it" as some of you may know a Bank in Marbella has raised an action implementing a European Enforcement Order against a couple from U.K who apparently fell behind their Spanish Mortgage

This couple have been ordered to sell their home in the U.K. which would enble this Bank to re-coup part of their loan as the U.K. lender would take the lions share of proceeds from this sale. (this could only happen in Spain)

As you all know there are thousands of U.K. citizens who have been robbed by the so called developers  & Banks who might never see their refunds, yet this Bank uses this E.E.O.  for some obscure reason the Spanish system does not reciprocate  , to add insult to injury their Housing Minister pleads with the Brittsh to come back  & purchase some of the properties which we bought off-plan some 8/9 Years ago

 Any comments.

J.G.Scobie.

If one borrows money on a secured loan basis one should be prepared to pay the money back or lose the collateral given for the loan when the loan re-payments are not made - if the collateral is your shirt on your back or your uk house then so be it. I do not see the injustice in the bank's position. From the way I read your position its OK to come to Spain and borrow to buy a property and when things go south (for whatever reason) you head north and pretend all is forgotten.

See information about the European Eforcement  for UNCONTESTED claims here

Important aspects to know:

1) it is not for all claims but just for those uncontested. The contested ones will have to follow the traditional procedures for execution of Court decissions abroad.

2) The European Regulation lays down minimum standards with regard to the service of documents (the document instituting proceedings and, where applicable, the summons to a court hearing) to ensure that the rights of the defence are respected.

3) The competent court in the enforcing Member State may, subject to certain conditions, refuse to enforce a judgment if it is irreconcilable with an earlier judgment given in any Member State or in a third country. In certain cases, it can also stay or limit enforcement.

The Spanish banks know they can get swift judgment in the UK in a fair and open court system.

It is a far less procedural environment.

12-4. nobody would dispute that the collateral for a secured loan, ie the house that the money was borrowed aginst, should be forfeit. but do you have evidence that these people also offered their uk home as collateral? please tell us.

i recall reading on this website the other day about spanish courts (was it catalunya?) starting to take the position that once a bank had recovered their house, or whatever was offered as security, that no further money could be recovered.

injustice, like justice,  is a two way street. if foreigners were given a fair shake of the dice regarding outrageous property scams in spain, we would probably be more philosophical when spanish banks demanded their pound of flesh.

Before posting a reply I went back to the original story on this via the Daily Mail website. If I'm reading the correct case it involves a couple both of whom are paramedics with a £300k cottage in the UK and a mortgage of £145k on a property near Marbella. Quite a chunk of property looking at the potential value of the two properties. There's no mention as to why the mortgage became difficult to service other than "when re-payments became difficult". 

I don't know the financial situation of the people involved however if payments have become difficult they may have overstretched themselves. The value of their properties seems quite large alongside paramedic salaries. Who is at fault for the difficulties? I guess not the bank who now want their capital back.

All of us who own properties either in the UK and/or Spain or wherever, know there is an element of risk if re-payments cannot be sustained. The consequences are clear and we know re-possession of the mortgaged property may not clear the debt and that the debt stays with us until discharged.

On the face of it whilst I don't underestimate at all the level of personal distress for those involved can we really blame the bank who has customers and shareholders to consider. Yep, there are many sad tales of the way people have been treated by developers/banks etc in the Spanish property market but that doesn’t make what’s happened here wrong does it?

I'll post the link as I wanted to read it again myself

Source Daily Mail 29th November 2010

The couple had taken out a mortgage of £145,000 with Banco de Sabadell for their apartment in Duquesa AND they ALREADY have a £250,000 mortgage through the Halifax on their cottage in Wiltshire. Where's the sense?
 

Some excellent comments in The Daily Mail.

CostaChris;  I think the problem is that there's a 250k mortgage on the UK property with the Halifax. If  they've owned it for 20 years they've obviously been re-mortgaging !!

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

Dear All,

it would not be surprising if they remortgaged to obtain equity to provide the 30% deposit for the Spanish purchase.

I suspect many buyers did this.

Regards

Norman

 Faro:

I can see UK lawyers and Judges opposing  those enforcements with success there in the UK. Remember:

3) The competent court in the enforcing Member State may, subject to certain conditions, refuse to enforce a judgment if it is irreconcilable with an earlier judgment given in any Member State or in a third country. In certain cases, it can also stay or limit enforcement.

12-4,

did this really happen as you say?

was the borrower just paying the premium without ever seeing the policy?

did their solicitor not inform them what they were taking on?

was it within the mortgage documents?

what a nasty shock to arrive when you think you have recovered from whatever caused the finance problems

was there corruption as well, with property being sold off cheaply?

is it still happening today with the usary rates being charged to first time buyers?

Regards

Norman

with regards to the original post, it's amazing how an EU ruling can be used in this case but when the boot is on the other foot and many of us very clearly cheated by the Spanish banks and justice system, with lack of BG's and court delays etc, the EU has no interest in showing a fair hand by making sure that those in the wrong  are bought to book and those wronged are compensated. I'm not saying the UK couple are in the right, but EU  justice should be for all, not just the soft targets. Sickening!