Dation in payment with shortfall

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17 Jul 2011 00:00 by manorpark Star rating. 165 posts Send private message

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Has anyone recently been granted a dacion en pago and been asked to make up the diference between the valuation and the mortgage?

Cambank say they are not offering dacion el pago to customers but explained that if they were they would revalue the property ( probably at 50% of the original value ) and then ask for a payment of the shortfall between the valuation and mortgage.

As the banks were overvaluing houses to give mortgages in the first place this seems rather unfair on the mortgagee but then I suppose the banks never lose in situations like this.

If anyone has any experience of this or any comments I would be glad to hear them.

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17 Jul 2011 18:44 by ruth Star rating in on a hill in rural L.... 117 posts Send private message


Jonas, posting over on SPI here:  http://www.spanishpropertyinsight.com/forums/viewtopic.php?f=2&t=5746  says this:
I have heard that rather than foreclose on a property, banks prefer to offer a "dacion en pago", but you need to have enough equity in the property to do this. (difficult in these times, of course)
My sister in law has just signed over her "dacion en pago". Her property was purchased for 200.000 euros in the boom and the bank have now taken it back off her for 145.000 euros and "forgiven" her the rest. So she didn't even have enough equity in her property. They said no to her initially and she got a laywer involved and has finally, after 6 months, had it accepted. During the whole 6 months the bank manager kept on telling her that there was only a 10% chance of her getting it accepted, but perseverance pays off sometimes!

This mush be a very tempting offer to struggling people who dont' want to spend the rest of their lives paying the bank back. They say foreigners are more likely to get accepted as it is more complex for the bank to persue you abroad, where as with a spaniard, they can just take the money owed off their wages.

Apparently the dacion option looks better on the banks books than a reposession.
Hope this helps.


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18 Jul 2011 18:05 by manorpark Star rating. 165 posts Send private message

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Thanks for the reply Ruth.

 It sounds as though your sister in law has been very fortunate if the bank have agreed a dacion and are prepared  to overlook the balance owed on the mortgage. It goes to show that perseverance does pay off.

I would be interested to know which lawyer she used and which bank she uses. If you don't want to publish it here could you send me a private message please.

Unfortunately the bank I use are saying a resounding 'no' to dacion en pago and have a reputation for pursuing mortgagees in their own country to claim back any money owed to them.

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18 Jul 2011 18:20 by ruth Star rating in on a hill in rural L.... 117 posts Send private message

Hi Manor Park

Sorry, it's not MY sister in law - I was quoting Jonas who was writing on Spanish Property Insight on this thread here:


If you go towards the end of the thread you will see that Jonas has posted again giving more details about the case which involves HIS sister in law.

It's an interesting case.


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18 Jul 2011 19:32 by manorpark Star rating. 165 posts Send private message

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 Oops ! Thanks anyway Ruth . Having read the circumstances I can see why the bank took the property back.


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18 Jul 2011 20:12 by MexMaya Star rating. 30 posts Send private message

My understanding si that the banks cannot refuse you a dacion en pago, it is your consumer right to do this.  i am not sure it is legal either to value your property at half the price.  You can get your own Tinsa valuation done and then get a solicitor to argue it out with them.  CAM banks are in deep trouble so will probably try all kinds of tricks but in every case I know where a dacion en pago went through the banks said NO many times until a solicitor got involved.  They will try all kinds of things but you can too, tell them you ahve no other assets in europe and will be moving to Australia to live with family, no hope of them pursuing you there and a dacion en pago is better for them than the extra costs of re-possessing

THey played hard ball for years with us - return the compliment!!!!

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