Handing back the keys to the bank.

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03 Jun 2013 18:08 by Ribbena Star rating. 2 posts Send private message

Hi

I need some advice on my options regarding my mortgage in Spain.  I am seriously thinking of handing the keys to the bank and walking away.  Is this possible and would there be repercussions in doing this?

Basically I purchased the property over 6 years ago.  The price was €198,000.  I got a mortgage for €152,000.  The property is now in negative equity and is worth €95,000 according to similar properties I have seen in local estate agent windows.

I am unemployed as past 4 years, and I have not missed any payments to date.  Although, I am really struggling to keep these payments up.  If I continue to meet the mortgage, and going by todays repayment rates, I will end up paying the bank €244,800 plus €54,600 already paid off the mortgage.  Add this to my deposit, the property will cost in the region of €345,400, which is quite ALARMING!!

I know I will be losing out on my deposit.  But is it really worth continued paying for a property that is costing over 3 times more than what it is worth, when I realistically cannot afford to pay for it and enjoy it.

If I were to hand the keys in what would happen with Community Fees that are also up todate and utility bills.  Can the bank chase me for the debt back in Ireland.

Any advice would be greatly appreciated.





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03 Jun 2013 19:09 by Roly2 Star rating in Almeria. 648 posts Send private message

 Would a better option not be to talk to the bank and see if you can have an interest only mortgage for a while?  If you work out what you pay through a mortgage for a property, any property, most people would be surprised so I would just try to put that out of your head.  

The bank can of course come after you which is why I would speak to them.   They will not be keen to have another property on their books.    Good luck whatever you decide - I am sorry it has become difficult for you.





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03 Jun 2013 19:16 by Ribbena Star rating. 2 posts Send private message

Hi Roly2

Thank you for the reply to my post.  An interest only option is well and good.  However, it does not alleviate the problem and it will also add extra repayments to make up the difference on the property.  I thank you for your concern.  My only comfort is that I know I am not on my own in this situation, as there are 1000's of people in the same boat.





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03 Jun 2013 21:24 by eos_ian Star rating in Valencia. 498 posts Send private message

eos_ian´s avatar

 It sounds like your best option is to organise a DACION EN PAGO, which although seems more of a fable to many than a reality, from experience with family members, they do tend to give it to foreignors before giving it to nationals. It is your only hope of giving it back to the back. The bank can't take repossession of the house that quickly even if they wanted to. The house would always be in your name until the courts decided to return it to the bank. To do a dacion en pago you must prove you cannot afford to pay the mortgage and if the bank manager is on your side that isn't too difficult unless you are earning on a fixed contract in Spain at the moment or declaring Autonomo, even then if you are not earning much they will still consider it. When a bank agrees to a "dacion en pago" they become responsable for all debt related to the house in terms of community charges, water etc You should be left clean not owing a cent. Anything else is not a dacion en pago but a way to get more money out of you at a later stage.  Be careful, I do not recommend you hand the keys back and just walk. It is a criminal offense unless you go to the courts first and declare that yu are bankrupt, you can't pay the mortgage and you ahve to return to yout country. This won't  free you of the bank but it will avoid a criminal offense, according to a Judge I know. I recommend you speak to your bank to find a solution along these lines if you can't keep up the payments. Always best to be upfront and warn them even write them an email or drop of f a letter to the manager and have him/her sign it on receipt so you ahve proof of your movements. You must show good will but be very clear if you can't continue paying. It is not impossible, a family member of mine got one done and dusted in under two months.

good luck



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Ian :   EOS TEAM MEMBER 

www.eyeonspain.com/blogs/ianandspain.aspx




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05 Jun 2013 14:36 by mariadecastro Star rating in Algeciras (Cadiz). 9347 posts Send private message

Legal Questions? Speak to Maria Direct

 Always take this into account:

Banks are legally obligued to give to your property a minimum value when repossessing it.

This minimum value is now ( after May 15th), of 70% if it is your first residency and 50% ( if it is not) OF a VALUE which comprises:

Valuation of prinicipal of mortgage loan

Interests

Delay Interests

Legal costs

Much higher, generally, that the market value of the property.

As a matter of fact, there is very low property market in Spain, because... the whole market is controlled by Banks at present. So, enfocing  this Mortgage Debt AId  Law is the most sensible and fair thing to do as there is really no other way to participate in the ( if you can call it so:  "property market"



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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11 Jun 2014 21:31 by costahammer Star rating. 2 posts Send private message

Hi Maria,

Do you have an email I can speak to you on 

 

th

 

 





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12 Jun 2014 10:21 by mariadecastro Star rating in Algeciras (Cadiz). 9347 posts Send private message

Legal Questions? Speak to Maria Direct

Yes. You can email me here:  web@costaluzlawyers.es

Cheers

Maria



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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12 Jun 2014 12:16 by mariadecastro Star rating in Algeciras (Cadiz). 9347 posts Send private message

Legal Questions? Speak to Maria Direct

Dear CostaHammer:

Please contact me privately so I can give my email address to you

Cheers

Maria



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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12 Jun 2014 13:04 by mariadecastro Star rating in Algeciras (Cadiz). 9347 posts Send private message

Legal Questions? Speak to Maria Direct

Legal tip 1168. What after defaulting on mortgage payments? 
12 June 2014 @ 12:03 
 

Qué será, será?

 1. Generally, the Bank will send to you a notice of Case being sent to Courts after three monthly defaults.  They do not always send the case to Courts right away but  an active negotiation with the Bank, with the help of a professional advised at this stage. It is not a good idea just to leave payments unattended and run away.

2. Once in Courts, the Judge will issue an enforcement order and will notify this to you for you to oppose it. Notification needs to be made to you in due address and through right means.Right address is that  which was agreed as address for notifications in the mortgage deeds. You need to have full control of any notification being sent there after your payment default as this is in many cases taken as an advantage by the Banks- notify you while and where absent-  forobstructing your defence rights.

 3. Defence of your position in Courts. Reasons to oppose the enforcement have been recently increased after a Decision by the High Court Of Justice of the European Union. 

  4. Best strategy at this point is to  answer the repossession with a dation counteroffer in order to  reach an agreement with the bank to have the whole debt  settled after the auction.  Of course the difficulty of this varies depending on the equity you have on the house and policies of the Bank.

 5.-As you know the way the Bank has to obtain  liquid value out of the house is through public auction. If no one bids the bank can keep it for no lower than 70%  (for first residences) and 50% (for second residencies ) of value for auctions. Value for auctions is a big value the house was valuated for for mortgage purposes. It is contained in mortgage deeds and comprises:  borrowed capital+ interests+ legal expenses

So, three CostaLuz Golden rules:  (1)Never leave a repossession order unattended ,(2) Have control of the address for notifications,(3) Hire a good lawyer. 

After the debt is liquid an enforceable, they can start an European Enforcement Order in the UK. 

 
 


_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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06 Apr 2019 13:02 by mariadecastro Star rating in Algeciras (Cadiz). 9347 posts Send private message

Legal Questions? Speak to Maria Direct

A post which is of most relevance now, due to the new scenario  that a recent decission by the European Court of Justice has brought in regards to if banks can use the executive foreclosure procedure to repossess your property if the " anticipated maturity clause is included" in your mortgage deeds

 



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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