Posts Tagged ‘mortgage issues’

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!

Spanish Mortgage Relief – Mark Stucklin

We recently had a great write-up from Mark Stucklin – a Barcelona-based Spanish property market analyst, and author of the ‘Spanish Property Doctor’ column in the Sunday Times (2005 – 2008) on the Coronavirus Crisis and the downhill effect.

Spanish mortgage relief for borrowers falling victim to the coronavirus crash.

I’ve had enquiries about the mortgage repayment moratorium that the Spanish Government introduced for people struggling with mortgages due to coronavirus.

The scope of the moratorium is understandably limited to residents struggling to pay the mortgage on their main home.

Non-resident and holiday-home owners don’t qualify for relief, but anyone in those groups now struggling to pay a mortgage in Spain will find some advice at the bottom of this article.

The mortgage repayment relief was approved by royal decree in March as part of economic measures worth 200 billion Euros.

The first thing to note is that this moratorium only applies to residents of Spain so ones struggling with their main home.

Don’t expect any relief if you can’t pay the mortgage on your holiday home:

  • because tourist rental bookings have collapsed, or
  • you lost your job back home.

If that’s your situation, skip to the bottom of the article and receive some advice.

Borrowers who qualify for relief can apply for a temporary and interest-free mortgage repayment holiday or deferment.

An application can be submitted up to 15 days or so after the decree has expired.

Some sources report this deadline for applications as currently standing on the 3rd of May.

Spanish mortgage moratorium requirements

  • Borrowers who can demonstrate they have lost their job or seen their income slashed by 40% or more
  • Family income in the month prior to requesting mortgage payment relief was no higher than three times the IPREM household income reference point,
  • Mortgage repayment plus expenses and monthly utility costs greater than or equal to 35% of net household income.
  • Mortgage repayments as a percentage of household income have increased by at least 1.3 as a result of the Coronavirus.

You have to apply for this mortgage relief with your lender providing:

  • Proof of unemployment and business distress,
  • Your Family Book to accredit household members and dependents,
  • Homeownership documents including the nota simple land registry filing,
  • Deeds of sale and mortgage deeds, and
  • A debtor’s declaration of responsibility in compliance with the requirements of this decree

Non-resident and second-home owners in financial distress

If you find yourself in financial distress as a non-resident or second-home owner due to this crisis you may see yourself miss your Spanish mortgage repayments.

You need to get hold of the situation quickly and start talking to your lender about the options.

If you feel you need professional help from experts who know how to negotiate with banks and get you the best outcome, get in touch with financial distress and negative equity experts EU Property Solutions to discuss your case.