Consequences of Property Repossession
Property repossession was and still is commonplace in Spain. Lenders will often resort to repossession if you fail to keep up with your mortgage repayments. The real problem arises after this.
Many people believe that repossession is the end of this ordeal however it is only the beginning.
Read on to find out more about the consequences of repossession for you.
Failure to keep up with payments on your property will result in repossession action from your lender. How long this will take can vary from lender to lender and depends on your exact circumstances. The exact form that this repossession action will take also varies, but the main outcome is always the same, you lose your home, and your lender will pursue you for the difference between the sale value and your remaining mortgage.
The Repossession Process
Generally, after several missed payments, your Spanish lender will begin repossession proceedings. Due to the Spanish court, this process can be protracted. The bank/lender will write to you to inform you of this. However, often these letters are only delivered to Spanish addresses so you may not even be aware that your property has been repossessed.
After repossession, the bank will sell your property to fulfil your mortgage obligations. This is where the problem arises as, in most cases, the property will sell for well below the mortgage value. This leaves you, the owner, with a shortfall to pay.
As mentioned above, your mortgage lender will sell your property, and the proceeds will pay the remaining mortgage. However, you are still responsible for paying the shortfall between these two amounts.
This amount will likely be much larger than you expect as banks add on their additional charges, legal costs, and interest. The lender will demand this payment in full, and failure to pay will result in the lender pursuing you relentlessly. This will be in both Spain and your country of residence.
Can they pursue the debt?
Unfortunately, the answer is yes. No matter where you live, your lender will chase you for the money owed. Spanish banks are extremely persistent and employ a variety of pursual techniques.
This can include appointing local solicitors, securing judgements on and repossession of your property and assets in your home country. Read more about these recovery techniques.
Alternatively, they can sell your loan to a Vulture Fund. This is the worst-case scenario, as these large international funds are ruthless and efficient at recovering debt. Read more about Vulture Funds.
What are your options?
Ideally, you would need to act before your property has been repossessed. This makes it much easier to negotiate with your lender and reach an agreement. If you are struggling to pay for a property, find out how we can help.
If your property has already been repossessed, it is only a matter of time before your home and assets are on the line. Repossession action is likely to have already started, and the sooner you act, the better the outcome.
As with any property debt issue, getting the right advice is the first step. EU Property Solutions have been assisting families with foreign property debt for over a decade.
Our UK-based team work with Spanish legal representatives to get you the best deal possible.
Call us on 0330 124 1230 or email [email protected] for your free case review.
What If I Didn’t Know My Property Was Repossessed?
It is relatively common for lenders and banks to just write to your Spanish address. So, many people don’t even know their property has been repossessed until payment is demanded. Regardless, if you haven’t paid your mortgage, you will still be liable, so it makes little difference if you did not know.
Will My Debt Be Sold To A Vulture Fund?
If your property is repossessed, it is more likely that the debt will be sold to a vulture fund or passed to a collection agency. This is more or less the worst-case scenario as these funds are more aggressive and more willing to put in the time and effort to recover the money that is owed.
Why Should I Trust EU Property Solutions?
For over a decade, we have been helping people in exactly the same situation you find yourself in. We understand that you have probably been lied to by the bank, developers, and estate agents. If our amazing results don’t say enough for themselves, check out some of our testimonials or, call our office and speak to a member of the team. You can even chat with previous clients of ours over the phone!
Why not get in contact?
As we said, the best way to hear how we can help is to contact us today.
All of our initial calls are confidential and completely obligation-free. So, if you don’t like what you hear, you don’t have to go any further.
If you want a solution to your property debt issue, click the button to talk to us.