handing keys back

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09 Jun 2009 00:00 by almerisol Star rating in spain. 6 posts Send private message

hi, i have a mortgage with cajamurcia as well as one on another property here in spain, i asked the bank if i could hand the keys back and they have said that if i do any shortfall will be put against any other properties i have here in spain and possibly the UK, they said they would extend my existing interest only mortgage for 3 years if i deposit 10k in an account for 3 years, that's blackmail as i see it, plus i do not have it, anybody got any suggestions?





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09 Jun 2009 16:38 by mariadecastro Star rating in Algeciras (Cadiz). 8033 posts Send private message

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Almerisol: We have been approached by a Bank offering interest only mortgages to our clients for 5 years ( I need to rectify as I said typed 15 in an earlier post).

We think that the best strategy in your case is to give keys back to the bank and try to get a favourable interest-only mortgage from different other institutions to fnally have the real facts ( answer to the offer of keys to the Bank and offer for an interest-only mortgage) before making the final decission.

Also know that giving the keys back to the Bank is not a grace they concede but a right you have.



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10 Jun 2009 12:03 by almerisol Star rating in spain. 6 posts Send private message

thanks maria, if i give the keys back to them, can they embargo my other properties here in spain and the UK for any shortfall if they sell it for less than the mortgage value.





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10 Jun 2009 12:51 by mariadecastro Star rating in Algeciras (Cadiz). 8033 posts Send private message

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The agreement with the Bank will be in the sense of having the full debt paid by the house and them recognising you owe them nothing.



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Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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10 Jun 2009 12:51 by TechNoApe Star rating in Duquesa, Manilva. 1291 posts Send private message

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There is an interesting blog article about it here:

Mortgage Arrears - Is "Handing back the Keys" a Solution?



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10 Jun 2009 14:11 by mariadecastro Star rating in Algeciras (Cadiz). 8033 posts Send private message

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And translations of provisions of the Civil Code applicable to these cases here, a post dated January 2009.

http://www.eyeonspain.com/blogs/costaluz/1094/legal-tip-27-dation-in-payment-a-right.aspx

Legal tip 27: Keys back to the Bank: a right.
15 January 2009 @ 14:51

Dación en pago ( dation in payment) is not something that you  will luckily and graciously obtain by the "wonderful mercy of the Bank"  BUT A RIGHT, out of provisions 1175 et seq of our Civil Code:

Article 1175.

The debtor is entitled to transfer their assets to creditors in payment of its debts. This dation, unless otherwise agreed,  will only  release him from liability for the  liquid amount of  the value of  transfered assets. Any agreement on the effect of these dations  concluded between the debtor and its creditors will be done according to provisions of Title XVII of this book,  and according to what is stated in the Code of Civil Procedure.

The offer of payment and the assignemt for collection

Article 1176.

If the creditor to whom the offer was made  refuses to admit it with no reason given, the debtor will be free of responsibility by the assignment of the good.

(...)

Article 1177.

For the assignment of the good to be effective, the debtor must  firstly announce it to those people interested in the obligation.

The assignment will be uneffective if it does not strictly conform  to the rules governing the payment.

Article 1178.

The appropriation will be made by depositing the goods before the judicial authority, to whom the offer will be credited in some cases, and /or the announcement of the assignment in others.  Once the assignment is made, it will have to be announced to interested parties.
 
Article 1179.

The costs of the assignment ,  where appropriate, will be paid by  the creditor.

Article 1180.

 Once the assignment has been duly made, the debtor may request the court  to cancel the obligation.

While the creditor has not accepted the assignemt or the approval of the Judge has not been made,the debtor may withdraw the assigned good or amount,  leaving the  obliagtion remaining.

Article 1181.

Once the assignment is made and the creditor allows  the debtor to withdraw the good or amount,  the debtor will lose any preference on the good. The co-debtors and guarantoors will also be  free of debt.
 
 
 By Maria L. de Castro

web@costaluzlawyers.es

www.costaluzlawyers.es

Castellar ( Cádiz)  reservoir. By Luis Lopez-Cortijo



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Director www.costaluzlawyers.es

El blog de Maria



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10 Jun 2009 19:17 by almerisol Star rating in spain. 6 posts Send private message

thanks maria, the bank have agreed to giving me an extra 3 years carencia without putting any money on deposit , so should be able to keep tyhe property, seems they were not to keen on getting the keys back.





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11 Jun 2009 07:38 by mariadecastro Star rating in Algeciras (Cadiz). 8033 posts Send private message

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 Oh yes! Talking to the Bank about  "dacion en pago" ( giving keys back to them) s really work as a pressing tool for negotiaions on mortgages in many ocassions.

Congratulations!

Maria



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Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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