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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.

Increased Repayments On Spanish Mortgage Products
07 April 2017

Our Spanish Legal Team in San Pedro have reported a worrying trend in some Spanish mortgage products. Many of these products are now moving away from their 10-year interest only period and moving to repayment. The issue we are finding is the jump in payment amounts is very substantial. So substantial that repayments are have increased up to 3 times the initial amount. 

We have come across investors who's mortgages are moving from interest-only to repayment, the jump in the payment amount was €1,000. More worryingly, this repayment is now commencing when the many are reaching retirement age. This highlights the loose lending practices of lenders pre 2008.

Many ask can I leave the keys to my property with the lender and walk away. You can, BUT the risk involved is very high. By doing this you are putting your home assets in jeopardy. In some cases, the banks can react negatively and aggressively and place a charge on your own home in the UK or Ireland. It is essential that should you no longer wish to maintain and keep your Spanish property that you amicably liaise with the lender. Seek specialists in European Property, there are numerous experts who can advise and liaise on your behalf.

If your mortgage rate is changing and your monthly repayment in Spain increasing and you wish to dispose of the issue then see the correct help. 



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Negative Equity: End of Interest Only Fixed Rates
15 March 2017

Negative Equity: End of Interest Only Fixed Rates

A question asked daily; I have an empty property in Europe but can’t sell due to negative equity. Is there a way out? And despite many claiming to be “mortgage prisoners” or “trapped” by Negative Equity, there are definitely options to be taken to resolve any Negative Equity burden. It is realistic to expect excellent Negative Equity settlements in Portugal, France, Cyprus, Bulgaria and even Canada, but it is important to research the best experts out there. 

End of Interest Only Fixed Rates

With a focus on Spain, I have been noticing a new trend which is worrying. Many borrowers who purchased pre-2008 may have financed the purchase with a Halifax-Lloyds Mortgage product. Whilst initially these products are very serviceable on an interest only basis this period is coming to an end for many. The typical product was sold on a 10 year fixed interest rate and as this expires we have seen mortgage payments rise to clearly unsustainable levels.  For example, I met an elderly couple whose mortgage rose from €250pcm to €1,600!! How they were expected to pay this I have no idea. There are signs of loose lending here as this product payment increased in conjunction with retirement age, I would definitely question the lending policies in this instance.

With the big increase in mortgage payments coupled with community fees, IBI taxes, and reduced winter rent many customers will find these mortgages unsustainable. Coupled with Negative Equity this is a substantial burden, but there is some positivity here. As I have mentioned previously it is realistic to achieve an excellent settlement. My Advice, look for those who specialise in European Property and consider a team who have the full package and expertise. 

Don't be afraid to message me in relation to similar issues. 



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Repossession of European Property
22 February 2017

Repossession on European Property

What will happen if I go into arrears on my Spanish Mortgage?

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. Many courts in Europe are inundated with repossession cases so the process can take some time.

Repossession, Repossession, Repossession

The process of repossession in Spain is long winded and costly, these costs are added to the loan outstanding. Each loan has a penal rate written into the deed. This penal rate is applied on top of interest and capital due from the minute a loan is late or fully in arrears. Normal Penal Rates are between 3% to 12% but can be higher and are recorded at signing of the mortgage deed.

Once repossessed your lender will then likely market the property. Many properties sold in possession are sold at a far reduced value often around 60% of open market value. This can increase losses for both the Bank and the borrower.

Reality of Defaulting On Foreign Mortgage

Since the financial crisis in 2008 Spain has seen well over a quarter of a million properties repossessed. A staggering figure, and are large proportion of these repossessions are foreign owned properties. Many British and Irish borrowers feel they can “hand back the keys” and walk away from the property thinking the debt is settled and they cannot be pursued in their home country.

European Banks are beginning to become more pro-active in the debt collection. The dust has settled on property market and general economic decline on the continent and Banks have been given the ultimatum to tidy up their loan books. Some have even been sold to Private Equity funds who are looking to make a return for their investors.

How The Banks Can Pursue You

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.

This will become a more prevalent problem and we urge overseas borrowers not to ignore their liabilities abroad. 

European Banks have the ability to pursue overseas borrowers for outstanding debts.

It is as simple as that.



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Swiss Franc Mortgages
01 February 2017

Swiss Franc Mortgage contracts which involved thousands of borrowers are in default, across Cyprus and other Balkan and European Countries.

Back in April 2016 we released a blog on the issue regarding Swiss Franc Mortgages, and as we predicted the situation has worsened. Many borrowers still continue to struggle to repay their loans, even with record low interest rates.

The Once & Past Dream

The idea of owning a property in the sun was a dream for thousands across the UK, dreaming of a place to settle, and retire, a retreat for the grandchildren to visit.

For many, they would have borrowed and mortgaged the property usually through a Euro product, but as we know pre-2008 lending processes were “loose” and the idea of a Swiss Franc Mortgage appealed to many, not realising the predicament they would find themselves a few years down the line.

No one could have foreseen the events of 2008 and thus many borrowers have now become victims of circumstance.

Swiss Franc Mortgage Products

These Swiss Franc Mortgage Products were sold on the basis on the exchange rate at that time which included a variable interest rate. Since then most clients which have contacted us are dealing with 3 major problems:

  1. Rise in the interest rate on their mortgage, not highlighted at the time.
  2. Exchange Rate Depreciation – £ to SwFr 40% from 2008 to date.
  3. The Property is in negative equity anyway i.e. a mortgage debt greater than market valuation.

Movement on Swiss Franc Mortgage Agreements

Early last year Cypriot Banks became more aggressive with those parties struggling, serving Writs  on borrowers defaulting on their loan agreements . This often involved appointing UK Debt Collection Agents and Solicitors which exposed people for the first time at home in the UK…… Assets and incomes then become at risk.

Many overseas borrowers with Swiss Franc Mortgages are struggling to find a route out of this issue.

Thankfully, there are now options for borrowers in this situation. There is the on-going legal battles in the Supreme Court but the key here is to do something now and take control.

 



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Your Foreign Mortgage: What Happens If You Dont Pay
15 December 2016

Your Foreign Mortgage: What Happens If You Dont Pay

If you don’t pay your foreign mortgage overseas it is likely to have the same consequences if you didn’t pay your mortgage in your home country. Many with mortgage debt in Europe seem to be under the illusion that not paying the mortgage will have no consequence to them. This is incorrect and the foreign lender can legally come after you.

Consquence If You’re In Negative Equity

EU Property Solutions regularly see borrowers with a mortgage greater than the house value stop paying and leave the keys with the lender. Many of these borrowers do not know they are in negative equity and are putting themselves in serious jeopardy as they outstanding debt can be aggressively pursued back in their home state.

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. Many courts in Europe are inundated with repossession cases so the process can take some time.

Once repossessed your lender will then likely market the property. Many properties sold in possession are sold at a far reduced value often around 60% of open market value. This can increase losses for both the Bank and the borrower.

When the Bank sell 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. We have seen instances when lenders have appointed UK Solicitors / Collection Agents and placed a 2nd charge on a borrower’s home.

Important Advice

It is essential not to ignore your lender and to liaise with them if you have any issues paying your mortgage, if not your home assets are at risk. Contact Professionals in regards to EU Property Services dealing with Property Debt! Settlements are achievable!!



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Mortgage Arrears Mounting Up: How can I deal with it?
29 November 2016

Mortgage arrears / Community fees mounting up?

People daily who are in significant mortgage arrears and have missed community fee payments are becoming more and more confused with their options and how to deal with it. Many borrowers who purchased properties in Spain were not aware of the associated costs. Community Fees and IBI taxes are fees external to mortgage costs in Spain. These additional fees have resulted in significant stress for thousands of people since the property crash in 2008.

Community fees are owed to the Community Presidents in Spain for the up keep of communal. These Presidents are authority in ensuring the community you have purchased in is visibly up to scratch e.g. maintenance of common areas, cleaning of swimming pool and general grounds keeping. It is important for those whom have purchased within a community to meet these fees.

What happens if I fall behind?

If your payments fall behind Presidents can proceed with legal action. Presidents have the authority to instruct debt collection agencies in UK / Ireland to chase owed debt.  These debt collection agencies will enforce an attachment of earnings order or put a charge on your home.

They can legally withdraw outstanding debts directly from salaries or force you to sell your UK / Ireland home. As with community fees, if you are in mortgage arrears you can be pursued back in UK / Ireland. If you ignore these debts you are putting your home and earnings at risk.

For many struggling with mortgage payments and community fees, the reality is they are sitting in negative equity.

Do Not Ignore This: There Are Always Options Available!

We advise you seek professional advice from a company who can work with you and your lender to ensure an amicable solution is achieved. In many cases this involves disposal of the negative asset and negotiation on the shortfall. Typically, from experience in negotiations the settlement is around 10% of the outstanding shortfall.

If you find yourself in a situation of mounting Mortgage arrears and outstanding community fees, then please seek advice from professionals. Simpily Google EU Property Help and many will appear in the search.

 

EU Property Solutions Team

 

 



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Is Your Spanish Property in Negative Equity and You Want To Sell?
23 November 2016

 

Are You a Mortgage Prisoner?

A lot of people stuck in Negative Equity call themselves “mortgage prisoners”. They believe that as they have negative equity they have no option but to continue to pay the property mortgage and continue property ownership. Simply that selling in negative equity is not an option.

From our experience, we can tell you this is not the case. In some instances, the property can be put up for sale and the shortfall settled with the lender, however, in other instances there are legislations involved restricting options to sell. So, it is always it is essential you seek professional advice to understand your circumstances and what options you have.

Many borrowers purchased property in Spain pre-2008 during a boom and now find themselves in negative equity following the much documented “crash”. Many ask “can we sell?” and in response, it depends. Sales are dependent on a variety of factors including your lenders protocol, your circumstances, and the property itself etc. When you approach any professional they should relay all the options available, specifically those related to your lender, ensuring you have advice tailored to your circumstances.

Locations of Worst Case Negative Equity

Specifically, in Spain many are finding their properties in Negative Equity, Especially those in the following areas/developments:

·         Bahia de Casares

·         Duquesa Golf

·         Alboran Hills

·         Manilva

·         Miraflores (Mijas)

·         Benatalaya

·         Princess Kristina

·         Sotegrande

·         Corvera Golf

·         Polaris World

In summary, you may be in Negative Equity but in some instances, you can sell but in others you cannot. BUT, no one is a mortgage prisoner and there are numerous options available providing you seek expert advice.



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Help to reclaim a deposit on an unfinished development?
14 November 2016

“Can I reclaim a deposit for an unfinished development” is becoming a question of many lately.

You can now reclaim deposits on Unfinished Developments ...

Pre-2008 many property investors purchased unfinished off plan properties in Spain. It was an attractive proposition and purchasers where asked to put down a deposit. Unfortunately, unfinished developments litter parts of Spain and those who put down deposits lost their funds and their dream property. You can now reclaim deposits paid.

Now is your chance to reclaim your deposit!

Following a recent high court ruling it is possible for borrowers to get back their deposit which was lost during the property crisis in Spain.There is now help to ensure wronged investors can reclaim deposits.

How much can I reclaim?

In most instances, you can recover 100% of your lost deposit plus interest accrued from the date of payment. If you can provide evidence of the monetary transaction and purchase contract then this should be sufficient to commence proceedings.

How will the process work?

  1. Seek advice from industry experts -  ensure you meet the team prepared to take your case on and that they are willing to work on a no win no fee basis.
  2. Gather all documentation needed i.e. proof of payment and contract for the transaction.
  3. Finalise Spanish Power of Attorney and small appointment fee to file documents and allow representation in Spain.
  4. Wait for your Refund  and move on with your life!

 



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SPANISH DEBT – CAN THEY PURSUE ME IN UK?
28 July 2015

Since the financial crisis in 2008 Spain has seen well over a quarter of a million properties repossessed. A staggering figure, and are large proportion of these repossessions are foreign owned properties. We 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’ letter box and make a run for it. It is actually something out of the movies! 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 misjudgement.

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 a 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 a pace.

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.

 

James Bell 

EU PROPERTY SOLUTIONS



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