Posts Tagged ‘Property Debt’
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.