Posts Tagged ‘Bank’

Interest-Only to Repayment: Tenfold Increase

We hosted a webinar back in July in respect of Interest-Only mortgages. We have had quite a bit of interest in this very niche subject. It is becoming more and more relevant as time goes on. Click here to watch it on demand!

We have seen and helped hundreds of clients who had taken out Interest-Only loans who are now paying the hefty price.

This type of mis-sold mortgage issue is something that we’re seeing with our clients. They come to us after realising their 15-year interest-only term is coming to an end. We had a recent client who found out that his monthly repayments would go from €250pm to €2,150pm; an extremely high spike in payments that would very quickly become unfeasible

In this Webinar; our Chairman, Terry goes through a few examples of what we have seen and the successes we have achieved for our clients. He talks about interest-only mortgages particularly in Spain but also discussed Europe as a whole.

EU Property Solutions, with our legal team,  have the Bank’s gripped. But when it comes to loan sales, they are very often sold to vulture funds. They are different animals completely and these situations are becoming more prevalent. Last month a Spanish bank even sold a performing loan book. Everything was up to speed and good, but they still sold it on so be careful with that backdrop.

Undoubtedly, many people were mis-sold properties, however, it’s very difficult to win that argument or that war. There is one bank in Spain that has sold a lot of these interest-only mortgages but there are other banks involved too. If people try to do direct approaches with the Bank it very rarely works out, therefore we respectfully suggest that you don’t. In this webinar, Terry goes through why you shouldn’t do that and how we can attack the problem for you.

If your Interest-Only period is coming to the end of its term and you want to explore your options, contact EU Property Solutions today and we can help you.

📞: 0330 124 1230

📧: [email protected]

💻: www.eupropertysolutions.com

Buying or selling property in Spain?

This blog will be providing you with tailored advice on how to avoid these pitfalls when buying or selling property in Spain.

The Spanish property market has been through a turbulent period over the last decade. EU Property Solutions work with borrowers assisting them out of difficult situations often not caused by themselves as they fell victim to the Property Crash.

The 2007-2008 crash has led to people looking to sell and get out of the property burden and those looking for a bargain investment.

We have a few pointers if you’re considering buying or selling a property in Spain.

SELLING:

Price the Property to Sell

  • The property market in Spain has masses of supply currently, especially in the British/Foreign investor market.
  • Your property needs to be priced to sell, or it will sit on the market for a long time.

Will you clear any outstanding mortgage and debts?

  • Will your sales proceeds (sales price less costs) clear your outstanding mortgage?
  • Do you owe any debts for IBI taxes or Community Fees?
  • If you do not clear the mortgage your lender will not release their charge on the property and the sale cannot complete.

 Sales Costs

  • 3% Capital Gains tax if you are a non-Spanish Resident.
  • Estate Agent fees are 3-6% of the sales price.
  • Energy Efficiency Certificate typically €150-€300.
  • Plus Valia Tax – this is a local tax on the increase in the value of the rateable value of the land.

BUYING:

Purchase Costs

  • Legal conveyancing fees
  • Land Registry Fees
  • Notary Fees
  • Income Tax Provision when purchasing from non-residents.
  • Bank fees for money transfers and mortgage fees.

 Future Costs of Ownership

  • IBI Taxes
  • Community Fees
  • Utilities
  • Insurance
  • Non-resident tax

It all adds up.

 Understand what you are buying.

  • Research is essential
  • Is your mortgage affordable in the long term? Does the rate change?
  • What rental yield can you achieve – be careful if you have been promised a yield. These often don’t materialise.

Brexit and your registrations.

  • Have your NIE number ready well before starting the purchase process
  • Open a Spanish Bank account well before the purchase process.
  • Brexit implications for use of property need to be understood.

If you’re interested in hearing first-hand from our Chairman Terry Bell elaborate on any of the above, you can sign up for our free webinar that we’re hosting on Thursday 16th September at 6PM ‘FREE WEBINAR | Brexit and Covid-19 | What does this mean for property values?’ Click HERE to sign up!

PS: Don’t forget to visit our YouTube channel to access a full library of our free videos & webinars. CLICK HERE

Squatters in Spain

There is currently a huge problem in Spain with ‘Squatters’ unlawfully occupying unused holiday homes.

With Covid-19 travel restrictions ongoing, many holiday homes across Europe have been sitting empty for over a year. This has made the likelihood of Squatters in Spain invading properties x10 times more likely than before the pandemic.

Squatters are moving into these empty properties, making it their home and fitting new locks. They also avail of the properties water, electricity, and bins; leaving property owners left with increased bills and bins which cannot be used.

In a recent interview with Ena Cummings, founder of GoldenKeys Property; squatters were described as “vile, evil beasts” who should be thrown out immediately. Unfortunately, due to Spain’s insufficient legal system, Community Presidents not taking action, Banks being irresponsible and the countries water and electric board turning a blind eye, therefore, this means that property owners are left to deal with these squatters themselves.

In Ena’s community, there are 8 squatters who not only have moved into the development but have displayed public indecency. They have thrown bleach and wine at homes on top of stealing water, electricity, and their bin facilities. Ena expressed that the community wanted an AGM with the community presidents.

“It was arranged in 2019 to get the removal mafia in from Madrid. This was to remove the squatters, to get a loan, and pay it through our community fees (which was agreed.) But our two so-called presidents won’t sign the forms as they don’t want to throw people out on the street.”

The only guaranteed way to get squatters removed from a property is to hire a removal mafia from Madrid. This comes at a fee of €5,000. The other option to protect an empty home is to pay €35 a month for a photographic alarm system. The alarm system will notify the Guardia Civil who can throw them out within 48hrs. Nonetheless, both options add further expense to unused holiday homes in Spain.

Ena is adamant that “Spain needs to change their law, but it’s going to get worse before it gets better.”

If you have an unused property in Europe that you no longer can maintain, this is your time to act before squatters make your home theirs!

If you would like to dispose of your foreign property, there are options available for you to do so.  Get in touch with EU Property Solutions today and speak with our specialist team for your FREE consultation.

You can find Ena over on her website:
www.goldenkeysproperty.com
[email protected]

Why are Banks doing Loan Sales?

Welcome to Part Two of our four-part Blog Series featuring the impending Loan Sales that are occurring with European Banks.

This series of blogs shares our knowledge and keeps our readers up to speed with the fast-developing market that covers foreign mortgages. This blog answers the question of ‘Why do banks sell on loan books?’ As Covid-19 restrictions ease, and life begins to resume, Banks are starting to face their issues. What they are faced with are a number of different aspects that are driving them to undertake loan sales which typically, they sell to what are called vulture funds.

The main points as to why Banks are selling these loans are:

1.) They are getting a lot of pressure from their Central Banks, such as the Bank of Spain, which is directing them as to how they must conduct themselves.

2.) There is still a lot of legacy debt left over from the 2008 Financial Crash which needs to be recovered.

3.) The banks want to free up funds on capital because very often this is not the best debt they can carry on their books, which in turn helps them tidy up their balance sheets and they can also get on with what they are supposed to do which is be a bank in their own country for their own people.

EU Property Solutions have seen a huge increase in enquiries from people who are sent threatening letters from foreign banks. We advise those in this situation to take action immediately, especially if there is a negative equity property involved.

Banks don’t give notice as to when they are looking at a loan sale. They can be brutal in their attack and they are far more aggressive in their approach. If they are going to come after you – they will come after you; they will look to get their pound of flesh.

Vulture Funds are a completely different animal therefore they have a completely different agenda, they are far more aggressive in their approach.

Furthermore, if you have contemplated resolving a Negative Equity issue, wherever it may be; then get in contact with our specialist team via the methods below:

Keep an eye out for Part 2 of our Loan Sales Blog Series to find out more!

Did you buy foreign property pre-2008?

It could be believed that 2005 – 2008 was a prosperous and positive time; with the Economic Boom and thousands of Brits and Irish, finally being able to afford the dream purchase of a ‘luxury’ holiday home in places like Spain or Cyprus.

At EU Property Solutions we see this experience in a different way. It was a time where the ‘buying frenzy’ was encouraged by duplicitous bankers, promoters, and developers.

For buyers, funds were easy to access both at home and abroad; non-status mortgages were two a penny, and credit checks didn’t even factor into the equation. With little to no barriers stopping the purchase of ‘too good to be true places’; it was only a matter of time before the foundations of this property boom literally crumbled underneath us all.

It was no wonder that in the autumn of 2008 when the world stopped turning and the financial crisis hit. These properties built on financial sand in the years before, suddenly sank quickly into Negative Equity; leaving people stuck with unwanted debt.

Countries including Cyprus and Spain were savagely hit as the whole banking industry was shored up by their State Banks. The collapse of the financial sector, and many of its long-established institutions, started a domino effect, leaving those at the end of the chain the main losers.

Those who dared to live the holiday home dream have now, unfortunately, become victims of the Economic Boom. Their once refreshing holiday cocktail soon left a bitter lingering aftertaste that is still being paying for to this day.

If the above sounds familiar and you have found yourself stuck with a Foreign Property in Negative Equity, our specialist team are here to take your call today!

We have published our first ever eBook ‘Foreign Property Mortgage Nightmare – 2006+ and all that..’

This book is not looking in any way to compound the pain of foreign property debt or ‘rub it in,’ but it seeks to explain the works that we undertake and what we have learned over the past ten years in this field.

Click here to download your FREE copy of our eBook!

My loan has been sold! – What are Loan Sales?

Welcome to Part One of our four-part Blog Series featuring the impending Loan Sales that are happening with European Banks.

As we come out of the third lockdown, the banks are having to start facing issues in the real world.

What they are doing straight away (especially in Spain) is two things:

  1. Consolidating and merging. La Caixa and Bankia have now merged and,
  2. There is also the ongoing saga of BBVA and Sabadell who are contemplating merging.

What is more worrying is that across Europe, (including Cyprus) Loan Sales are impending. Banks are looking to avoid what they call delinquent or troublesome debt and anything that is hard work for them. Selling these debts off at a discount to what are called ‘Vulture Funds’

EU Property Solutions implore that people to try and keep control when there even a sniff of this because dealing with people that buy the loans are Vulture Funds, who are a lot stronger than banks.

They are very good on a cross-jurisdictional basis and with litigation. They want their pound of flesh and they are not going to wait forever! Vulture Funds are short-term investors seeking recovery on their funds and they are pretty brutal in their attack.

That said EU Property Solutions have dealt with a number of Loan Sales situations when vulture funds are involved.

So, we advise you against waiting for this to happen and to take action today!

Keep an eye out for Part 2 of our Loan Sales Blog Series to find out more!

My Foreign Loan has been sold – Help!

A frequently asked question that we’ve been receiving recently has been “My Foreign Loan has been sold – Help!”

As we come out of Covid-19, Banks worldwide are looking to tidy up their acts. This usually takes the form of:

  • Writing off bad or delinquent debt,
  • Pressurising those struggling to maintain payments, and
  • The worst of all – selling their loans to Vulture Funds.

When Banks start to struggle, they look to take the pain of quickly writing off what they see as ‘bad debts’ and then look to ‘cash out’.

By ‘cash out’ we mean to sell these loans at a discount. That then frees up capital funds and for them, they do not have to manage delinquent accounts.

This ‘hassle’ factor has become more prevalent for our dear foreign banks over time and with this recession, we believe, and we are hearing such Loan Sales are and will become more prevalent going forward.

The purchases of such loans are usually referred to as ‘Vulture Funds’ and their key characteristics and agendas are best summarised by the following facts:

  • They are usually International Funds, Hedge or Venture Capital in nature,
  • Unlike the European Banks, they are strong in their approach to cross-jurisdictional issues and collection of debts,
  • They are looking for short term successors/cash flow from the portfolio they purchase from the Banks,
  • In the main, they are not long-term lenders, and most importantly, and
  • They are far more aggressive in their recovery approach, wanting their ‘pounds of flesh’.

A ‘long story short’ – Vulture Funds will:

  • Be in it for the short term,
  • Be legally aggressive with non-payers,
  • Chase across borders more efficiently than the Banks, and
  • Look to recover every €/£ they are owed.

We have several cases which saw us start our work with a Bank but they, in turn, sold that on to a ‘Vulture Fund’. That then requires us to pivot in terms of attitude, stance, and most importantly the strategy for our client.

If your Spanish/Cypriot/Portuguese mortgage loan has been sold to a third party AKA Vulture Fund, it is vital that you know your options.

Our specialist team are here to provide you with a strategy to alleviate foreign property debt as a whole.

You can also head over and watch our latest YouTube video on Vulture Funds, click HERE.

Call us today on 0330 124 1230 or send us an email at [email protected]

Did you purchase in Polaris World or Costa Blanca Golf Resort?

Costa Blanca has long been a popular hotspot for many people wanting to buy their dream holiday home. Over the years many have followed their dream purchasing either investment properties or holiday homes for retirement futures.

During the Spanish property boom pre-2008, many people purchased properties in this region. Our focus this week has turned to the notorious Polaris World Golf Resorts. 

They were once Europe’s most ambitious holiday home developers and consisted of numerous large-scale projects. These resorts were widely advertised on TV in the UK by legendary golfer Jack Nicklaus (the designer). This was to entice investors looking for a better life in the sun.

During this period, properties sold at highly inflated prices. Some apartments going for €200,000 (£160,000). Thousands of foreign investors flocked to purchase at these resorts. However, when the financial crisis hit in 2008, the prices of these apartments declined rapidly.

Despite the slump in the property market, Polaris World continued to build and ignored the warning signs.

By 2010, they were forced to relinquish most of their assets. This included the golf courses and unsold properties, to the lender. These once-popular resorts are now best described as ghost villages.

In 2018 some apartments are struggling to sell for €60,000. This is leaving many in Negative Equity with unaffordable mortgage payments to meet.

  • Do you own a property in Costa Blanca?
  • Do you know someone going through a similar situation?
  • Are you struggling to pay your mortgage?
  • Are you having trouble selling your property due to Negative Equity?

There are solutions, do not delay and contact us today. 

EU Property Solutions specialist team can offer tailored advice and solutions to end your nightmare forever.

Our legal team in Spain works effectively with borrowers to offload the negative asset and secure a significant debt write-down.

This often saves hundreds of thousands of euros for our clients. We have a dedicated team that will keep you informed every step of the way. 

Other well-known golf resorts in Costa Blanca such as:

  • Roda Golf
  • United Golf
  • Peraleja Golf
  • Corvera Golf & Country Club

Have now found themselves in the same predicament and therefore are essentially mortgage prisoners with nowhere to turn.

Our success is proven, EU Property Solutions recently worked with a client who had purchased a holiday home in Peraleja Golf, Murcia, Spain. Due to the property crash, our client’s property value plummeted from €300,000 to a forced sale price of €140,000. When the clients approached us, the outstanding mortgage was €257,000.

As the clients were pensioners, they were unable to maintain the high mortgage repayments.

The property had been placed on the market for 5 months at €200,000. It had generated zero interest due to the development itself falling into a state of disrepair and the linked golf course closing indefinitely.

To make matters worse, the couple owned a mortgage-free property in the UK with significant equity. Furthermore, they also owned other assets including ISAs and bonds. Understandably, they were worried about the repercussions of this problem property on their assets in the UK.

After providing specialist assistance, we negotiated the voluntary surrender of the property along with a complete debt write-off (Only fees payable in this instance were the consultancy fees of EU Property Solutions.)

So, this was an excellent result and as such has allowed the couple to move forward with their lives and enjoy their retirements.

If you would like to ask us a question relating to your foreign property issue, click HERE

Never want to miss any essential information. Sign up for our FREE monthly newsletter today, click HERE.

Behind on Community Fees & IBI Taxes?

Have you fallen behind on Community Fees & IBI Taxes? If so, read on!

EU Property Solutions assist people daily who have significant mortgage arrears and missed community fee payments. Many borrowers who purchased properties in Spain were not aware of costs such as Community Fees and IBI taxes. These additional costs and Mortgage Debt in Spain can result in significant stress.

Community fees are owed to Community Presidents in Spain. These Presidents are charged with ensuring the community in which you have purchased is visibly up to scratch – for example, the maintenance of common areas, swimming pool cleaning and general upkeep of grounds.

It is important for borrowers to keep up to date with these fees as debt collection can be instructed by Presidents in Spain to the UK and Irish Debt Collection Agents.

If you cannot pay your Spanish mortgage and fall into arrears, then your mortgage balance will increase.

Missed payments are added to the balance along with penalties and interest. Furthermore, you risk legal action and ultimately you are putting your home assets and income at risk if you do not act.

If you cannot maintain payments on your Spanish property, then swift action is needed. If you act quickly through an intermediary, such as EU Property Solutions, then the matter can be brought under control and an amicable and desirable outcome achieved.

In most Spanish settlements we can achieve:

  • The surrender of the property to the Bank and a complete debt write off.
  • We can even negotiate Community Fees arrears and IBI tax arrears into the settlement.

Visit our YouTube channel, we publish videos on a weekly basis. This week’s video sees our client, Sue Geraghty discuss the issues she was facing before appointing our services. CLICK HERE TO WATCH.

If you are struggling with any repayments on your Spanish Property call EU Property Solutions on 0330 124 1230 for a free case review.

CYPRUS AND SWISS FRANC MORTGAGE ISSUES

EU Property Solutions receive numerous enquiries from borrowers who purchased properties in Cyprus pre-2008 and were offered Swiss Franc Loans.  These mortgages were sold on the basis that the Swiss Franc was a stable currency. Unfortunately for mortgage holders, the Swiss Franc has been a very strong currency against the £ and the €.

Bizarrely pre-2008 Cyprus had the Cypriot Pound as their currency with the Euro then taking its place. At no point has the Swiss Franc ever been used other than for property purchases. Even more amazingly, Switzerland is not even an EU Country. Without doubt, these mortgages were mis-sold* and at best were deemed to be loose lending by the Cypriot Banks

Following the global financial crisis of 2008, Swiss Franc Loan balances grew due to the Swiss Franc appreciating against the Euro. Added to that there was a property crash worldwide and property prices in Cyprus plummeted. This created Negative Equity and left significant shortfalls for borrowers.

Add to this the issue of a lack of title deeds available and Land Registry issues for purchases in Cyprus, then you have a ‘heady mix’ of issues to overcome. This ‘heady mix’ manifests itself in sometimes huge Negative Equity positions.

Help is however at hand and settlements can be reached by us at EU Property Solutions ….. through our extensive knowledge, negotiating skills and together with our local legal teams, full technical understanding of all cases.

EU Property Solutions were appointed to assist a couple who purchased a holiday home in Paphos and their financial exposure position and our work saw:

  • A mortgage balance was SwFr414,000 which at the time of purchase equated to £182,000,
  • This ‘ballooned’ to £330,000 due to the currency fluctuation referred to above.
  • The property value was only £150,000.

EU Property Solutions negotiated the sale of the property with the lender and a lump sum payment of £35,000 to close the mortgage account. Savings of c£145,000 achieved.

Furthermore, Cyprus is not the only country we have seen the use of Swiss Franc Mortgages. We have seen cases in Poland and Hungary with mortgages issued in Swiss Franc Mortgages.

If you are losing your Swiss Franc Mortgage battle and wish to discuss your options, please call EU Property Solutions today on +44 (0)330 124 1230.

Spanish Banks chasing debt in the UK

Spanish Banks chasing debt in the UK

Since the financial crisis in 2008, Spain has seen well over a quarter of a million properties repossessed. A staggering figure! Spanish Banks chasing debt in the UK has increased.

A large proportion of these repossessions are foreign-owned properties.

EU Property Solutions 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 post their keys through a Bank or representing solicitors’ letterbox not fully aware of the consequences.

These debtors have the impression that Spanish creditors cannot pursue their home country assets. They also think that the Banks haven’t got the time or resources to pursue overseas.

Anyone who signs a mortgage deed in Spain, including guarantors, is personally liable for the loan.

Any legal action will likely be notified to the Spanish Address on which the mortgage has been placed.

Many overseas borrowers in Ireland and the UK will be unaware of any proceedings against them until the process is gathering apace.

In terms of debt perusal in the UK or Ireland, lenders can look to recover your home assets. Many lenders will appoint UK Debt Collection agents leading to an effect on your credit report.

The Spanish lender can look to put a charge on your property even if it already has an existing mortgage and can enforce an Attachment of Earnings Order.

Spanish lenders seem to be developing a greater appetite for overseas debt perusal.

EU Property Solutions can assist anyone in this situation so please contact the team today on 0330 1241230 to arrange a free initial consultation.

Cypriot Vulture Funds

Since the start of 2020, we have seen a spike in enquiries, particularly from those with problematic Cypriot mortgages due to Cypriot Vulture Funds.

It has been common knowledge for some time now, but the Cypriot & Greek Banks have been lining up the sale of their NPL loan books for a while.

A recent article in the excellent ‘Cyprus Property News’ https://www.news.cyprus-property-buyers.com/, confirms a €4 billion sale by two players in the mortgage market. This will develop as the Banks look to ‘tidy up’ their loan books STILL reeling from the 2008/9 crash.

With any Foreign mortgage, trying to decipher what is truly going on, is difficult. Sometimes the teams within the Banks don’t even know, so why should you.

This niche area needs serious negotiators with strong knowledgeable legal representation on the ground in the country in question. EU Property Solutions has the complete package here – right across Europe.

Getting the right advice, from afar is difficult at best….impossible in most instances.

NPL’s can arise from any Banking covenant failure that may arise. Typically, these Banking covenant failures can arise from:

  • Mortgages with arrears on them,
  • Title and Deeds issues,
  • Swiss Franc mortgages,
  • The loan being greater than the value i.e. Negative Equity, and

Loans that revert from Interest Only to Repayment.

The issues above continue to plague mortgage holders and with over 60,000 British and Irish mortgage holders in Cyprus alone, these problems are not going away any time soon.

EU Property Solutions only ever act for the client and despite offers, would never act for banks.

That said, we recognize that the Banks of today are in an invidious position as they try to move on. They face the task of trying to unravel the awful loans written by less than scrupulous Banks and Brokers back in the day.

At best, the Banks are in zombie mode with all the pressure to bear from Bank of Cyprus, IMF etc, requiring them to sort these issues, but not providing them with the resources such as a Land Registry system that works.

EU Property Solutions and their sister company Bell & Company www.bellcomp.co.uk have over the past 10 years come across many, many debt purchasers such as the debt purchasers listed below.

The comments above are not in any way malicious about the teams in these Vulture Funds, but realistic. The teams within Vulture Funds have a job to do…and do it they will. Vulture Funds buy distressed debt/NPL’s from struggling financial institutions but get all the rights of the debt at their outstanding value i.e. the loan amount plus all costs and interest.

They are not long-term holders of this type of debt and look merely to maximize their return on the loan book and each and every loan in it.

What does this mean to those under such pressure, knowing a Vulture Fund now owns your mortgage?

  1. If you have a problematic debt with them, they will look to resolve it from their angle a soon as possible,
  2. This includes litigation in Cyprus and in the U.K. and Ireland,
  3. Their due diligence process will be far more stringent than the Banks to date when determining assets and liabilities,
  4. They will work on the premise that if a client is deemed to have sufficient assets to cover their debt…they will look to maximise their recovery from these,
  5. These include property assets including your home, pensions, cash in the bank, investments, etc and

Any other actions they see fit to maximise the return on their loan purchase.

HOW TO AVOID THE WRATH AND FURY OF VULTURE FUNDS….

Active engagement is vital, but, be aware Vulture Funds are far more clinical in their approach. There are no friendly chats here. They will hang on your every word; unlike previous conversations, you may have had with the Banks and their debt collection teams in Cyprus.

Third-Party Representation in such cases, where Vulture Funds now own your mortgage, is absolutely vital.

Vulture Funds are very effective in their work – which could possibly put mortgage holders at serious risk with UK assets.

Our mantra in our sister company – Bell & Company is always #KnowtheWorstAchievetheBest and it is so relevant with the Vulture Funds now buying up NPL’s in Cyprus

FINAL COMMENT – DOING NOTHING IS NOT AN OPTION HERE.