The Financial Crash of 2008/09, saw a catastrophic drop in property values of holiday homes especially in Spain, also including Tenerife. The following recession saw many people experiencing Spanish mortgage defaults and indeed there have been many Spanish mortgage repossessions.
Under Spanish law and repossessions, the mortgage holder will be liable for any shortfall arising for the unpaid debt in Spain.
The availability of mortgages and loans at that time was crazy and the ‘loans to values’ were sometimes over 100%. Since these days of madness, we have seen some instances of drops in property values of 50%+. In one instance we saw a property drop by 70% in value. This is known as Negative Equity in Spain.
If you are in this position you are not alone. We are advised that there are over 250,000 such properties suffering negative equity in Spain. Where the loan balance exceeds the property value. Some people refer to this as a negative equity loan or negative mortgage.
In the 13 years+ since the financial crash, there has been a very limited recovery in terms of values and negative equity persists.
*We recently saw an interest only mortgage go from €1,200pcm to €5,000+pcm for a 70 year old couple.
Typically, clients who have such a negative equity issue work with the backdrop of rising assets in terms of UK or ROI home values, pensions, etc. However, the Spanish negative equity position persists, eroding potentially individual’s asset base.
A lot of clients fear the unknown. Listening to apparent ‘experts’ with claims such as “you cannot be chased in your home country.” Over and above this, very often the countries we work in have legal systems that are not fit for purpose. NOR ARE THE CUSTODIANS OF LAW IN THOSE COUNTRIES TRUSTWORTHY!
By today’s standards nearly all mortgages of this type would be deemed to have been mis-sold. However, there is no chance of any recompense and indeed Banks and lenders are hardening their attitudes.
In over 10 years of working in this niche field, EU Property Solutions has developed working relationships with all Spanish Banks. Together with our legal teams are able to achieve outstanding results from difficult positions. A recent example saw a golf-development property with a negative equity position of €120,000 settle this deficit for €17,000 including fees.
There is always a cost to resolve these situations but is marginal compared to the Spanish negative equity problem.
It is free to talk to us, so please contact us now for a friendly chat about your concerns.
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We are a UK based firm with legal teams in Spain and Cyprus who understand the market and Bank practices as they stand. We remove the language barrier and utilise law, Bank lending flaws and current client circumstances to negotiate the best feasible outcome for all our clients.
EU Property Solutions was formed following the success of our associate firm Bell & Company. An FCA registered firm of Debt Strategists, Bell & Company assist individuals in difficulty in the UK and Republic of Ireland with Personal and Business-related debt issues.
We have an excellent track record of success. Our success stories and testimonials come straight from our clients & highlight the high quality of our works and outcomes. We have individuals willing to speak to prospective clients on the telephone to offer their story and experience.
Our obligation is always to our client and that is where our strength lies. Debt is highly stressful and emotional. We deal with debt day in day out and employing an intermediary removes emotion from the situation allowing clear strategy to be implemented to get the best outcome for our clients. Understanding a firm of professionals is acting on your behalf can remove stress and focus the mind to a positive end goal.