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EU Property Solutions- Experts in all Spanish property issues

EU Property Solutions offer professional assistance and advice in all areas of European property in particular, Spain. We can help provide strategies and solutions to solve problematic property issues, negotiate with lenders on debts, help reclaim lost deposits on unfinished developments and help with repossessions and mortgage arrears across Europe. We have offices in London, Belfast and Spain.

Can They Pursue Me In The UK?
09 October 2019

Since the financial crisis in 2008, Spain has seen well over a quarter of a million properties repossessed. A staggering figure! A large proportion of these repossessions are foreign-owned properties. 

EU Property Solutions find it incredible so many British and Irish borrowers feel they can merely “hand back the keys” and walk away from the property thinking they are somehow immune to any consequences once back home.

Many borrowers simply post their keys through a Bank or representing solicitors’ letterbox and make a run for it hoping for the best.

These debtors have the impression that Spanish creditors’ cannot pursue their home country assets and nor that the Banks have the time or resources to pursue overseas. This may be true in respect to small balances but in truth Banks are stepping up their overseas debt collection and debtors with this mind-set could be left to rue this misjudgment.

In order to promote free-trade commerce throughout Europe legal cooperation is essential and thus legal mechanisms are in place to facilitate overseas perusal.  This makes it nigh on impossible for the UK or Irish High Court to raise its own motion on grounds for non-enforcement or review.

Anyone who signs a mortgage deed in Spain, including guarantors, is personally liable for the loan. Any legal action with likely be notified to the Spanish Address on which the mortgage has been placed, and although logical, many overseas borrowers in Ireland and the UK will be unaware of any proceedings against them until the process is gathering apace.

In terms of debt perusal in the UK or Ireland, lenders can look to recover your home assets and many lenders will appoint UK Debt Collection agents and this could lead to an effect on your home country credit report.

The Spanish lender can look to put a charge on your property even if it already has an existing mortgage and can even enforce an Attachment of Earnings Order.  Spanish lenders to seem to be developing a greater appetite for overseas debt perusal given the magnitude of balances and Banking system overhaul.

It is imperative that if you have surrendered your property you communicate with the relevant lender to minimise the exposure and risk of your home assets.



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Overseas Foreign Debt
02 October 2019

EU Property Solutions are proud that we keep growing the number of clients we assist across Europe and in fact the world. Pre - 2008 we saw many investors purchase their property in the sun and a large number of these borrowers have fallen foul of the much-publicised property market decline.

With so many borrowers falling into Negative Equity and property debt EU Property Solutions was incorporated to assist as many individuals as possible. To date we have successfully completed cases in:

 

 

 

 

 

 

 

 

 

 

The bulk of our current works are in Spain and hence our office location there. Spain was significantly affected by the property crash post-2008 and naturally being an area of significant investment for borrowers from UK and Ireland we see thousands affected by the decline.

Looking further afield we have had in the last three months settlements in New Zealand and Hungary. The Hungarian case was another example of poor lending by overseas Banks using the Swiss Franc Currency.

We know the processes involved for each specific lender allowing up to date and current advice being available to our clients.



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What Happens If You Stop Paying Your Foreign Mortgage?
26 September 2019

IF YOU DON’T PAY YOUR OVERSEAS MORTGAGE, then it will likely have the same consequences if you didn’t pay your mortgage in your home country. Many with overseas mortgage debt in Europe seem to be under the illusion that not paying the mortgage will have no consequence to them – this is incorrect.

We regularly deal with the following types of cases:

  • Borrowers with a mortgage greater than the house value stop paying and leave the keys with the lender.
  • Many of these borrowers do not realise they are in Negative Equity and are putting themselves in serious jeopardy – as the outstanding debt can be aggressively pursued back in their own country.
  • If you don’t pay your mortgage, arrears will mount on your account and following a period of greater than three months your lender can commence repossession proceedings.
  • Once repossessed your lender will then market the property. Many properties sold in possession are sold at a far reduced rate value, often around 60% of open market value.
  • If the bank sells the property, you will be left liable for any shortfall balance if the property was in negative equity and this can be collected by lenders in your home country.
  • Increasingly we see instances where lenders have appointed UK Solicitors/Collection Agents and placed a 2nd charge on a borrower’s home.

It is essential not to ignore your lender & to liaise with them if you have any issues paying your mortgage, if not your home assets are at risk.



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Banco Sabadell Mortgage
04 September 2019

Banco Halifax Hispana was incorporated in 1993 to serve the needs of Expat buyers in the Southern Costas in Spain. Many investors took out mortgages with Halifax as they were a trusted UK High Street lender giving them confidence in their overseas property purchase and finance they obtained.

Unfortunately, many borrowers now find that their loans are no longer with Halifax.
See the below timeline:

EU Property Solutions experience with Banco Sabadell to date has been positive. We met with the Bank in their Seville office in April 2019 and the Bank confirmed there are many Non-Performing Loans. They also discussed they are increasing their collection methods in the United Kingdom and Ireland.

EU Property Solutions experience with Banco Sabadell to date has been positive. We met with the Bank in their Seville office in April 2019 and the Bank confirmed there are many Non-Performing Loans. They also discussed they are increasing their collection methods in the United Kingdom and Ireland.

Many investors look to place blame with the Bank, they did not write these mortgages and instead are working with borrowers to end their Spanish Property issues. Their proactive methods and legal approach allow overseas borrowers the opportunity to dispose of their property with minimal costs and issue providing it is done through legal avenues.

We work with all core Spanish lenders and British lenders who still operate there.



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“What If I Die Before My Overseas Mortgage Expires?”
02 September 2019

A tough question but a common theme our team experience here at EU Property Solutions. 

Demographically speaking, a majority of our clients are those of retirement age who purchased property during the boom period in Europe pre-2008. There have been multiple occasions where we have received enquires from people who have advised their mortgage term will last long into their 80’s.

Firstly, this is evidence of “loose-lending” and pre-2008 many lenders did NOT follow proper protocol. Since then many Central Banks’ have become tighter and increased regulation on lending across Europe. Ask the question of how a Bank deems someone of retirement age able to repay a capital repayment mortgage? Madness.

What is most alarming, is that some clients do not know how they can continue to pay the mortgage! Nor, the implications of not paying and if they did die – put simply debt does not disappear.

Should a borrower pass away the debt does not go with them. Instead, it will be put into the deceased’s estate and may have implications in terms of potential inheritance for children, etc. No one would wish to leave this burden on their children.

Accordingly, this is NOT a matter to be avoided, EU Property Solutions have solved troublesome mortgages of this type in Spain, Cyprus, Portugal, France & further afield.



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PROTECTING YOUR UK ASSETS
27 August 2019

EU Property Solutions regularly encounter overseas borrowers who have walked away from a property in Spain simply handing the keys back to the Bank. Many have a flippant attitude believing that Spain’s sperate legal jurisdiction means no liability can be pursued in their home country. This is WRONG!

We have assisted 2 borrowers who had 2nd Charges placed on their homes in the UK due to non-payment of their Spanish Mortgage and failing to liaise with the lender.

A reoccurring theme when first discussing cases with potential clients is an angry attitude towards their lender. Common phrases include “My mortgage was miss-sold” and “I’m not giving them a penny”. EU Property Solutions can relate to the anger and emotion associated for borrowers, but this approach will not resolve the situation and the burden is still with the borrower.

A promised rental yield on the property never materialized and David, unfortunately, fell into arrears with his Spanish mortgage lender and could not make further repayments. The property was in a development between Estepona and Gibraltar on Costa Del Sol and was also in Negative Equity. Due to non-payment the lender took legal action and placed a second charge on his home in the UK.

 We managed to successfully negotiate a significant debt write off whilst disposing of the property.

Part of our agreement with the Bank was to remove the second charge on the client’s home.

This is a similar story to David’s above. Phil fell into arrears with the property, did not engage with his lender and found his property in Birmingham had a second charge on it. We were appointed following a free initial face-to-face consultation and a huge debt write off was achieved along with the removal of the second charge from Phil’s home.



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Handing back the keys – am I still liable?
30 May 2019

Many owners of negative equity or unaffordable property in Spain simply handed back the keys to their overseas lender and walked away after the market collapsed.

A significant majority believe this ended their overseas property ownership and debt – this is incorrect.

As wronged as many feel they have been by the “loose lending” practices of Banks pre-2008, handing back the keys to a branch is not the way to resolve the issue. Many borrowers who followed this incorrect method now face significant shortfall bills that they are liable for.

From our experience, handing back the keys and walking away results in the following issues:

  1. The Bank initiating legal procedures in their home country to repossess and sell the property. Bank sales or forced sales only achieve a maximum of 70% of the open market value increasing losses.
     
  2. Should the Bank seek Judgement in their home state, collection and legal measures can be enforced in your home country. This puts all your assets at risk, including your home.
     
  3. Given the Bank have spent funds on legal processes your chance of a settlement is reduced. They are essentially ‘hacked off’.
     
  4. European Banks look to place second charges on UK property – from here they can force a sale of your home.

Walking away resolves nothing – don’t believe the forums!

Instead you could deal with your situation, liaise with your lender, understand your circumstances and the legal system of the country you purchased in, and appoint an intermediary.

Here’s some advice from our experiences:

  1. Appointing an intermediary removes emotion and anger – many borrowers feel wronged but a legal case of mis-selling isn’t going to end the burden of your debt? An intermediary removes emotional attachment and can liaise with your lender to get the best settlement feasible.
     
  2. Think about things from the Bank’s perspective: they have what they may classify as a non-performing loan to resolve. Amicable negotiations will benefit all involved.
     
  3. Be honest with your Bank. Transparency and a willingness to be honest goes a long way – even if you feel you have been mistreated in the past.

Don’t ever walk away from debt – it will catch up with you.

In some cases you may be able to “hand back the keys”, but it is not as simple as it sounds. The process is known as a Dación en Pago and is a procedure with strict requirements:

  • The property must not be in Negative Equity,
  • The lender must not have started repossession proceedings against the property,
  • You must be up to date and on time with repayments as well as with the Community fees and local taxes. 


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5 Top Tips for Renting Your Holiday Home
15 March 2019

Due to busy home and work schedules, the time spent at your holiday home tends to be shorter than you’d like.

Whether it’s in sunny Spain or picturesque Portugal, having a holiday home is a great way to feel comfortable while you’re abroad and do things the way that you like without the restrictions of hotels. Most people only spend a few weeks a year at their holiday home if they are lucky, so if you want to make the most out of the investment, have you considered renting it out when you aren’t staying there?

Here are our top tips if you decide to do so:

1. Let the taxman know

As is the case with most things, letting out your holiday home is going to come with tax implications. If your rental income is more than £2,500, you need to report this on your self-assessment tax return. However, if you decide to let your holiday home for the majority of the year then you could qualify for several tax reliefs, such as accounting fees and insurance. Bear in mind that these could change in the near future when Brexit comes into play.

2. Stay in the house yourself at least once a year

This one probably goes without saying for most holiday home owners as they want to make the most of their purchase, but staying in the house will highlight any issues such as low water pressure, missing kitchen utensils or any small improvements that could be made.

3. Give your guests a memorable stay 

Think about great hotel or holiday home experiences you have had and keep this in mind when preparing to let out your home. Comfortable beds and good quality bedding are usually number one on the list of desirable qualities. Invest a little more in these if you are able, as an uncomfortable bed can really dampen a holiday. Similarly, lack of or slow WiFi can be a great annoyance to guests, especially if your home is in a more rural area. Additionally, small touches like a bottle of wine or a list of your favourite local restaurants can leave a great impression and encourage people to leave good reviews about their stay.

4. Leave your property in trustworthy hands

If you don’t live in the same country your property is located in, then it is important to have someone trustworthy to manage it. There are many companies that will do this for you, just be sure to do your research first. Finding the right people will ensure that managing the property won’t cause a headache for you.

5. Effectively market your property

With websites such as AirBnB, renting your property has never been easier. Make sure to take good quality, inviting photos of your home as this is the first thing potential guests will judge your listing on. Enlist the help of a professional photographer if you don’t think your skills are up to scratch as this could make or break a booking. The review section is another critical factor that potential guests will take into consideration, so encourage happy guests to leave them and reduce any factors that could prompt a complaint.

In conclusion, enjoy your home, take note of these tips and enjoy a profit from it while you’re not using it!



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Are Bankia and Banco Sabadell about to sell your mortgage?
25 January 2019

Spanish banks have been making major moves lately to offload their non-performing loan books. This means 2019 will be a busy year for property debt collectors! If you have a Spanish mortgage, chances are you could be affected.

Just before Christmas, Bankia announced that it has agreed the sale of €3.07bn in bad real estate assets to private equity firm Lone Star. The deal will close later in the year.

Similarly, Banco Sabadell have also agreed to sell 80% of its property platform Solvia to a subsidiary of Intrum Group, one of the world’s leading debt collection companies.

What does this mean for your Spanish mortgage?

When a company buys up bad debts, they want to recover the money as quickly as possible. This could mean legal action as they typically take an aggressive approach towards recouping debt. They can also chase the debt back in the UK. However, this is actually good news for you as it means they are likely to settle the debt for a much lower amount. If you have a Spanish mortgage and are notified that your loan will be sold, now is the time to act.

What can you do?

For most of us a new year means a new start and January is the perfect time to take a look at your situation and come up with a plan to tackle your debt. Here are our top tips for approaching it:

 1. Set realistic goals

When people set New Year’s resolutions, often they are overly ambitious and give themselves goals that are unachievable. All this will do is make you feel negative and like you have failed when you are unable to achieve them. To avoid this, be sure to look at your financial situation thoroughly and give yourself small goals that you know you’ll be able to achieve. There’s no point in trying to pay back too much as this may even result in you getting into more debt.

2. Keep on top of your finances

One of the best ways to manage your finances is to keep track of all of your incomings and outgoings. Do this by writing everything down in a book and checking it daily. This will help you to understand your behaviour when it comes to money and will assist you when it comes to paying off property debt.

3. Seek professional help

Sometimes you need the help of someone that really knows what they are talking about when it comes to debt. This can help relieve the stress and emotional weight of your situation. Seeking advice from professionals who deal with these issues every day could be your best bet of resolving your debt.



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MORTGAGE GREATER THAN VALUE IN SPAIN – WHAT ARE THE REALISTIC OPTIONS?
24 October 2018

Following the 2008 Global Financial Crisis the Spanish Property Market suffered a drastic decline, and in some instances, property values halved.

This article summarises the current circumstances and trends and the options available to those suffering Negative Equity.

We have observed an improvement in property price trends over the last 12 months. Whilst this is positive, it is key to remember the rises are small and of a small value. It will take a significant time period for prices to ever recover to the peaks of 2007. Accordingly, many investors still deem themselves ‘mortgage prisoners’, feeling trapped by the burden of Negative Equity and unable to free themselves of the property.

Another reoccurring issue of late is that 10-year interest only periods are coming to an end on many property loans. As we move towards the end of 2018, many people are seeing their mortgage payments convert to capital plus interest, causing significant rises in payments to Banks. Couple rising mortgage payments and associated costs, such as IBI tax and Community Fees, with the property value being lower than the mortgage balance; owners are feeling the strain.

Unfortunately, we keep reading forum posts from owners who have handed the keys back to the bank and walked away. Despite best intentions, this does not conclude their liability. In many instances the bank will proceed to sell the property at c70% of the open market value, leaving significant outstanding shortfall debt. Should the lender deem it necessary, they may seek legal judgement in Spain, putting your UK assets at risk through the European Enforcement Order.

Another common problem we see is borrowers who are in Negative Equity marketing their property at a price higher than the current market value in order to cover their mortgage. The main issue here is that any potential purchaser utilising finance will only be able to borrow on the current market value of the property, simply meaning a purchase cannot be achieved at the vendor’s desired price.

We recently met with a lender in Spain to discuss their current protocol in terms of non-performing loans. This eminent lender has confirmed their intention to clamp down on the 5,000+ non-performing loans on a purchased mortgage book, with all borrowers being from the UK and Ireland. They are instructing legal firms in the UK to place charging orders on UK assets for unpaid arrears, providing they have judgement in Spanish courts. This is having a significant effect on investors’ UK assets and equity held at home.

Despite many thousands of borrowers facing these issues, there are solutions available and it is important not to feel trapped.

An option open to +borrowers is the orderly disposal of the negative asset, be it through open market sales or voluntary surrender at the lender’s discretion, followed by lender write down, or in some instances, debt write-offs in full. At times it is possible to include Community Fees and IBI tax debts in these settlements.

Another option open to borrowers in Spain is to sell the property and pay the mortgage shortfall difference. This option is unattractive to most, given the expense of property sales, along with a significant payment to their lender being required. All other property associated debts must be cleared to allow this to complete.

As the market improves there is hope for some overseas owners in Spain, but a large proportion have fallen foul of the market decline. Many blame themselves, but frankly, no one could foresee the decline in the market and the impact it would have on so many. Loose lending practices by Banks at the peak of the market coupled with the following market decline has left many people in a trying situation, due to no fault of their own.

Far too many bury their heads in the sand without realising there is a way out.



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