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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.

SPANISH PROPERTY EXPERT REVIEWED OUR WEBINAR
09 June 2020

As you may be aware we held our first-ever live webinar on the 27th May 2020 on Spanish & Cypriot Property Debt.

We had a great blog write-up from Property Market expert Mark Stucklin who discusses our webinar below.

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The economic crisis building as a result of the coronavirus pandemic will leave some people with mortgages in Spain in financial distress, through no fault of their own.

If this happens to you, it is advisable to seek help from independent experts on how to handle the situation.

Last week I attended my first webinar (online seminar, for those that don’t know), held by Terry Bell, speaking on behalf of Bell & Co. in the UK and Ireland, and EU Property Solutions in Spain and Cyprus.

These companies specialise in helping people with business and personal debt find negotiated solutions to their financial problems.

Terry’s presentation about the typical financial problems borrowers from the UK and Ireland run into with mortgages in Spain and Cyprus was an eye-opener.

For instance, there are still many people struggling with mortgages taken on in the boom years before 2008. They are not getting any younger.

Terry explained that the “demographic” of people with mortgage problems in Spain means that time is not on their side. They need to sort out this problem before it’s too late.

There are many people in arrears on their mortgage payments who think they can walk away from their foreign debts. They think the problem won’t catch up with them back home. That is wishful thinking, even for those who did this years ago.

Slowly slowly, Spanish mortgage debts are being worked through. Debtors are pursued back home on the basis of EU directives, increasingly by vulture funds who have bought the debt.

The worst thing you can do is stick your head in the sand and hope the problem will go away. It won’t.

The best thing you can do is contact third-party expertS, who have dealt with many cases like yours, and know what to do to get the best solution for you.

Experience is key to negotiating the best terms in this complicated situation. This is probably something you have never had to deal with before. And every lender in Spain has a different approach to dealing with what they refer to as ‘delinquent debt’. Only experience of dealing with many cases helps you decide the right strategy.

Terry talked about all the problems facing borrowers in Spain and Cyprus. There’s one brutal problem in Cyprus – that we can be grateful few borrowers in Spain are having to deal with:

  • Namely the Swiss Franc mortgages that were so gaily mis-sold to borrowers in Cyprus back in the boom years.

Since then, the value of property in Cyprus has plummeted:

  • Whilst the Swiss Franc has appreciated, crushing borrowers financially in a vice of negative equity.

Mercifully, most borrowers in Spain have euro mortgages, but some of them will still be in negative equity more than a decade after they purchased.

And now we have a new wave of financial problems to look forward to, thanks to the coronavirus crisis.

If you find yourself in financial distress, and unable to cope with your mortgage in Spain, don’t stick your head in the sand.



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Will I be receiving no rental income in 2020?
18 May 2020

Following the UK confirming that those returning from overseas travel will have to Self-isolate for 14 days, the Spanish Government has followed suit imposing the same restrictions.

With this in mind, the question is - will you be receiving no rental income in 2020?

This year’s Summer Holiday season may well and truly be cancelled. 

If you are reliant on rental income to support:

  • Your mortgage payments,
  • IBI taxes, and
  • Community Fees on your Spanish Second Home -

The above will see you face increasing pressure to top-up payments from your home income.

Speaking with a local Costa Del Sol Agent:

  • It was confirmed that many Second Home Owners will take on long term rentals but given supply, these rental agreements will be very low in income.

Furthermore, many will be left without employment & may fall behind on their rent.

Second Home headaches are stressful enough in more positive times, but in these trying circumstances, they can be a real burden.

There are ways to end this burden in an effective manner without the need to travel to Spain.

Especially if the mortgage is greater than the true market price and the associated selling costs…which can be as much as 12%.

Thanks for reading guys!



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Spanish Holiday Home Values to Decline
28 April 2020

Spanish Holiday Home Values to Decline

Uncertainty and the markets do not go well together, the Spanish Property market & Spanish holiday homes are no different.

NOBODY, BUT NO ONE KNOWS what is going to happen in the coming months because of Coronavirus.

For sure Spanish Property prices will decline – the extent of this drop is unknown. Spanish Property Expert, Mark Stucklin, completed a survey recently for his website which you can find on www.spanishpropertyinsight.com to get feedback as to how Covid-19 would affect Spanish Property Prices.  

Key points relating to Spanish holiday homes:

  • 57% of respondents think house prices will reduce a lot (greater than 10),
  • 37% of respondents think house prices will reduce a little (up to 10%), and
  • 6% of respondents think there will be no impact on house prices.

Yet another potential house price collapse, this will be alarming to borrowers as many are already self-declared “Mortgage Prisoners” with mortgage balances greater than their property value.

There are ways through this, and EU Property Solutions’ legal process can help avoid a protracted sale and the associated sales costs.  It is key to respond.

So, if you have:
1. Negative equity,
2. Falling rentals,
3. Lender issues,
4. Interest-only problems, or
5. Anything that relates to your property in terms of its problematic disposal….

EU Property Solutions have options and plans for every individual case as we ensure to protect you, your income, your home, pensions, and other assets – from any potential legal threat.

SEE BELOW A TESTIMONIAL FROM A VERY HAPPY & RELIEVED CLIENT - https://youtu.be/gOBqNM9IsLw

 



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CORONAVIRUS – SELLING IN LOCKDOWN
28 April 2020

Uncertainty of the pandemic continues around the world as Economies reel because of Coronavirus and imposed lockdowns essential to Public Safety.

Undoubtedly property markets suffer in periods of uncertainty.

2nd homeowners with property in Spain will be considering selling at this stage. Factors include no rental income for Peak season, declining values imminent, and currently an inability to visit the property.

Selling property during a pandemic comes with its difficulties:

  1. The property could be in Negative Equity i.e. the outstanding mortgage is greater than the property value. With prices set to decline again, more borrowers will find themselves in this scenario.
  2. Costs of sale in Spain can be 10-12% of the sales price. Vendors must factor this into their calculations.
  3. The property must be “priced to sell”. There is a massive supply of 2nd home properties across the Spanish Costas and being realistic is essential.
  4. Demand for 2nd homes will undoubtedly fall in this period and for the rest of the year as confidence is hit.
  5. Lending restrictions imposed last year reduced the buyer pool, we await Banks’ response to this crisis and how their criteria will change again.

As Mark Stucklin said last week:

“If you find yourself in financial distress as a non-resident or second-home owner due to this crisis you may see yourself miss your Spanish mortgage repayments.

You need to get hold of the situation quickly and start talking to your lender about the options.

If you feel you need professional help from experts who know how to negotiate with banks and get you the best outcome, get in touch with financial distress and negative equity experts EU Property Solutions to discuss your case.”

We have options and plans for every eventuality, ensuring we protect you, your income, your home, pensions, and other assets – from any potential or ensuing legal threat.



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Spanish Mortgage Relief
06 April 2020

We recently had a great write-up from Mark Stucklin – a Barcelona-based Spanish property market analyst, and author of the ‘Spanish Property Doctor’ column in the Sunday Times (2005 – 2008) on the Coronavirus Crisis and the downhill effect.

Spanish mortgage relief for borrowers falling victim to the coronavirus crash.

I’ve had enquiries about the mortgage repayment moratorium that the Spanish Government introduced for people struggling with mortgages due to coronavirus.

The scope of the moratorium is understandably limited to residents struggling to pay the mortgage on their main home.

Non-resident and holiday-home owners don’t qualify for relief, but anyone in those groups now struggling to pay a mortgage in Spain will find some advice at the bottom of this article.

The mortgage repayment relief was approved by royal decree in March as part of economic measures worth 200 billion Euros.

The first thing to note is that this moratorium only applies to residents of Spain so ones struggling with their main home.

Don’t expect any relief if you can’t pay the mortgage on your holiday home:

  • because tourist rental bookings have collapsed, or
  • you lost your job back home.

If that’s your situation, skip to the bottom of the article and receive some advice.

Borrowers who qualify for relief can apply for a temporary and interest-free mortgage repayment holiday or deferment.

An application can be submitted up to 15 days or so after the decree has expired.

Some sources report this deadline for applications as currently standing on the 3rd of May.

Spanish mortgage moratorium requirements

  • Borrowers who can demonstrate they have lost their job or seen their income slashed by 40% or more
  • Family income in the month prior to requesting mortgage payment relief was no higher than three times the IPREM household income reference point,
  • Mortgage repayment plus expenses and monthly utility costs greater than or equal to 35% of net household income.
  • Mortgage repayments as a percentage of household income have increased by at least 1.3 as a result of the Coronavirus.

You have to apply for this mortgage relief with your lender providing:

  • Proof of unemployment and business distress,
  • Your Family Book to accredit household members and dependents,
  • Homeownership documents including the nota simple land registry filing,
  • Deeds of sale and mortgage deeds, and
  • A debtor’s declaration of responsibility in compliance with the requirements of this decree

Non-resident and second-home owners in financial distress

If you find yourself in financial distress as a non-resident or second-home owner due to this crisis you may see yourself miss your Spanish mortgage repayments.

You need to get hold of the situation quickly and start talking to your lender about the options.

If you feel you need professional help from experts who know how to negotiate with banks and get you the best outcome, get in touch with financial distress and negative equity experts to discuss your case.



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BOUGHT THE DREAM? - NOW A NIGHTMARE?
10 March 2020

Did you buy the dream which has now turned into a nightmare?

Don’t take NO for an answer…The reason for our continued success across Europe, mainly Spain and Cyprus, is our refusal to take the 1st, 2nd or 3rd NO as the answer.

Murcia’s and most of the Costa’s credit-fuelled building spree up to 2008+ has ended in a rash of repossessions, empty villas, and roads to nowhere. The developments were once Europe’s most ambitious holiday home projects and the vast developments, golf courses, etc financed by supersized loans from Spain’s Cajas and Banks.

The properties were widely advertised on television in the UK to entice investors chasing the good life in the sun and hoping to profit from the property boom.

But now, years on, the holiday dream of sun-drenched apartments overlooking golf courses has turned sour. Apartments that once sold for €200,000 (£160,000) are struggling to fetch €60,000. The last resorts built are now ghost villages.

Today the bank-owned apartments that were selling for €200,000 at the market’s height, are being offered “as new” for €68,000 by the banks desperate to recover as much as they can.

Private sellers asking €50,000 struggle to find a buyer. Many owners who want to bail out can’t as their mortgages exceed the value of the property. This week has been a massively successful week so far  – but that would not have been the case if we accepted ‘no’ as our first answer.

‘Don’t take no for an answer, keep knocking down walls until someone says yes!’ – This is how we get results!

An example of our work saw:

  • A couple of retirement age approaching us last year.
  • They had been ‘sold the dream’ back in the day. An apartment purchased for €200,000, they remembered the date they signed, April 2008.
  • On the 15th September of the same year, just five months later, ‘their dream became a nightmare’. Overnight the value of their property plummeted to €80,000 and had not improved since.
  • The negative equity shortfall was c€100,000.
  • This couple had a 10-year interest-only mortgage and at the beginning of 2017 their mortgage payments doubled. Payment chances = none!
  • Almost ready for retirement, with a reduced income, the couple approached their lender to try to hand the property back or negotiate the repayments and write down the mortgage.

They were ‘at their wit’s end’ when the Bank rejected their offers/approaches.

The couple approached us for help. We approached the lender and after months of negotiation settled with them. They said NO to start with and NO again but we persevered and won. The €100,000 shortfall was settled for £20,000.



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Interest-Only Mortgage
26 November 2019

As we all know the property market ended its peak in 2007.

From 1996 to 2007, Spain’s national average house price rose by a whopping 197%. During this time thousands of foreign investors wanted a piece of the pie and were lured by interest free mortgages and rental guarantees.

It seemed a no brainer at the time as repayments were extremely low and affordable for a fixed 10-year time frame. In the UK, Halifax were the main protagonists of these mortgages and a mixture of slack lending and possibly mis-selling encouraged large volumes of UK and Irish to buy abroad, some taking equity out of their own home to purchase the dream home in Spain to retire in.

We are now in a period where borrowers who were on the ten-year interest only mortgages are seeing the end of this period. Capital Repayments spike and we have seen monthly payments double in some instances.

With increased monthly payments coupled with IBI Tax Payments and Community Fees many of these holiday investments start to cost too much a become a loss maker. Furthermore, with a rapid decline in values since 2008 many of these borrowers find themselves in Negative Equity. In most Spanish cases we can surrender the property to the lender and achieve a complete debt write off. 



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Don't Risk Your Financial Future
23 October 2019

A frequently asked question we receive is whether an overseas property debt issue could affect your ability to buy property in the United Kingdom or your home country. Every case is different, the below outline potential scenarios which could affect your future.

  • Many borrowers believe that their only option is to surrender their keys to the bank and walk away from their overseas property. They believe that there will be no repercussions at home.
  • We know through experience that Spanish Lenders place interim charging orders on uncooperative borrowers for UK or Irish homes. This effectively reduces your equity at home!
  • If you intended to sell your property asset to fund another purchase, then your funds obtained would be reduced. To have a clear title to complete the transaction your solicitor would have to release funds to the Spanish lender to remove their charge and have a clear title for the purchaser.

OR

  • Should you have borrowed monies from a UK lender and issued a mortgage for a Spanish Property then your mortgage offer is under the jurisdiction of the United Kingdom.
  • There are instances where the borrower has defaulted on their mortgage. Rather than going through lengthy Spanish Court Processes to achieve a judgment, the lender’s jurisdiction in the United Kingdom allowed them to apply to Credit Agencies to have a default placed on the individual’s credit file.
  • A default is disastrous should you wish to raise funds to purchase through a mortgage. It is unlikely that a lender will offer a mortgage to a borrower who has a default account on their credit report.

We are seeing an increase in Debt Collection Agents and Solicitors being used to pursue debtors.

Many of these Agents are threatening Personal Bankruptcy now and it is becoming apparent aggressive collection methods are being used moving forward.



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Community Fees & IBI Taxes
16 October 2019

EU Property Solutions assist people daily who have significant mortgage arrears and missed community fee payments. Many borrowers who purchased properties in Spain were not aware of the associated costs such as Community Fees and IBI taxes. These additional costs and Mortgage Debt in Spain can result in significant stress.

Community fees are owed to Community Presidents in Spain. These Presidents are charged with ensuring the community in which you have purchased is visibly up to scratch – for example the maintenance of common areas, swimming pool cleaning and general upkeep of grounds. It is important for borrowers to keep up to date with these fees as debt collection can be instructed by Presidents in Spain to the UK and Irish Debt Collection Agents.

IBI taxes are taxes paid to the Spanish Government, it is essentially council tax. These need to be cleared with no arrears for property transactions to take place. Given it is a state debt there is no debt forgiveness available.

If you cannot pay your Spanish mortgage and fall into arrears, then your mortgage balance will increase. Missed payments are added to the balance along with penalties and interest. Furthermore, you risk legal action and ultimately you are putting your home assets and income at risk if you do not act.

If you cannot maintain payments on your Spanish property, then swift action is needed. If not, balances will simply rise and the issue becomes out of control. If you act quickly through a professional intermediary, then the matter can be brought under control and an amicable and desirable outcome achieved.

In most Spanish settlements we can achieve the surrender of the property to the Bank and a complete debt write off, we can even negotiate some Community Fees arrears and IBI tax arrears into the settlement. Knowing this, do not ignore your increasing debt balances.



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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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