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Negative Equity Property Surrendered in Malaga

30 November 20221 min readby Tom Miskelly

Malaga San Luis Sabinillas Spain

A retired couple from Nottinghamshire approached us with their holiday apartment in San Luis Sabinillas, near Duquesa on the Costa del Sol.

They had a mortgage outstanding of €170,000 with a UK Building Society. The property was valued at €159,000. Leaving an €11,000 shortfall if the property was sold.

Monthly payments were only €90, but the issue here was that this was an interest-only mortgage and the retired couple, both over 70, would need to raise €170,000 in a lump sum to pay this off. This was not feasible. This is a perfect example of the loose lending practices seen in Spain pre-2008.

What we did

  • We surrendered the property to the Uk-based Building Society. UK lenders can be more difficult to negotiate with, so EUPS’ knowledge of the Spanish legal system had to be used extensively for this deal.
  • A complete debt write-off with Savings of €170,000
  • No payments had to be made to the lender
  • There was no impact or risk on the client’s UK assets

Although this wasn’t the largest debt, the relief the clients felt was massive. They felt like what was meant to be a dream apartment turned into a noose around their necks.

They were so grateful that they could enjoy their retirement without having to worry about property debt anymore.

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