Posts Tagged ‘Lender’

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!

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!

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.

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.