handing the keys back

[geordie12]

hello all
i bought a holiday apartment in albufeira in 07 and now due to ill health and early retirement plus about to come out of a 5 year interest only mortgage, can no longer afford the repayments. Our outstanding amout is much more than the current value so selling is not an option.
Our fiscal rep/ accountant has advised us to "walk away" and he says the bank cannot seize our uk assets ie. houses both mortgaged and not mortgaged.
i will be taking legal advise but in the mean time would appreciate your thoughts
thanks

 

[Lysos]

]Hi geordie,

It's my understanding that as this is in the EU the lender can pursue you for the debt, so perhaps you should "organise" your UK assets such that you don't have any e.g. put your residence in your wife's name - assuming you are the sole signatory to the Portuguese mortgage.

Don't walk away until you have sound, independent legal advice. Fiscal Reps don't always give sound advice; my friend has a villa near Tavira & was advised not to declare the rental income to the tax authorities. Advice that was ignored.

 

[capiti]

Hi Geordie, we are in much the same situation however we have paid our mortgage down so that we now owe the bank about what the property is worth if we could sell it. We have lost all our equity and don't now have the money to continue paying it off any further. We would like to hand it back to the bank and are wondering the same thing - will they pursue us in any way if we default on the mortgage. We are trying to sell it at a low price but no interest at all. Have you had any luck in getting more information? We live in North America and don't want to have them come after us here but can't imagine that they would to get the small difference owing.

 

[geordie12]

we have been told by our solicitor in Portugal that the bank CAN pursue us for uk assets but it is a long and costly excercise for them and as a recent court case in Portugal favoured the uk property owners it has now set a precident (?spelling) that the bank lost the claim. We have decided not to throw good money after bad. A well known estate agent in Albufeira has told us that last month alone over 300 properties in the albufeira/loule area have been handed back and the property values are dropping 1%-1.5% per month Thats alot of chasing if the banks are to get money back.

 

[capiti]

we have been told by our solicitor in Portugal that the bank CAN pursue us for uk assets but it is a long and costly excercise for them and as a recent court case in Portugal favoured the uk property owners it has now set a precident (?spelling) that the bank lost the claim. We have decided not to throw good money after bad. A well known estate agent in Albufeira has told us that last month alone over 300 properties in the albufeira/loule area have been handed back and the property values are dropping 1%-1.5% per month Thats alot of chasing if the banks are to get money back.

We have found out that it is the same here in Canada. They can pursue us here too. The value of our property is roughly what we owe so it would be costly for them to come after us for 10,000 Euros or so. I feel bad about it but we just don't have the money to continue with it. Keep us posted on how things go.

 

[icklepickle7]

Hi
We have a similar situation, the fall in the property market has left us with a massive shortfall, which we cannot afford to pay if we were to find a buyer, the banks require the shortfall paid to release the deeds. We can't afford the mortgage any longer and have tried to negoiate a reduction in payments with the bank but they are completely uncooperative. We have heard that technically they can come after any shortfall after repossession and selling the property on but in practice they do not.

We are hesitant to hand the keys back without some solid advise but no one seems to know- there must be 100's of people that have handed the keys back/defaulted on the mortgage so how come there isn't any one speaking up with how the banks have dealt with this?

Any advise or knowledge of any one who has been through the process and is happy to share experience would be gratefully recieved.

Icklepickle7

 

[capiti]

interesting info

Search on google for spanish repossessions.
I believe the process in Portugal is similar to this.

I also found a forum by a guy called John Clare who has a blog. Search on google for "algarve letters 2012/07/28" He wrote a post about this problem. You need to read down to get to the info.

 

[capiti]

More info

The Repossession Process In Spain
Mortgage payment missed and not cleared within 3 months

Bank passes to legal department and notifies client.

Failure by customer to clear arrears within timescale given; case is passed to banks appointed lawyers.

Lawyers take best measures to ensure customer is aware of situation by means of visiting property to hand over in person notification or registered post.

Lawyers unable to communicate with customer or client does not respond.

Notice placed for 3 months on relevant Courts notice Board.

Failure of customer to respond and clear outstanding amounts.

put into Court Auction to sell at no less than 70% of auctionable amount identified on deeds.

Sold at Auction outstanding debt is crystallised.

Failure to sell at Auction Bank takes over property at 50% of Auctionable price and full debt outstanding is crystallised.

Bank pursues customer for outstanding debt by use of Spanish Court order.

Attachment of earnings implemented or sale of UK assets enforced until debt is fully cleared.
At any point up to the Court Auction the repossession process can be halted by either clearance of outstanding payments, plus costs incurred including Penal Interest and legals or by agreement with the Bank for the property to be taken back or sold by the owner.

 

[icklepickle7]

Interesting stuff- does anyone know how long the banks have to take repossession action