Hi
Im looking for all and any advice.
This is a short version of a very loooong story.
We had a villa built a house in the Costa del Sol three years which has basically started to fall down and we were forced to move out and return to the UK about five months ago.
We are still paying the mortgage on the property of 1800 euros a month despite the fact we cannot live or even visit the property as it has been declared unsafe.
We are a youngish couple with three kids. This was going to be our nest egg so we invested our savings into the property rather than pensions etc.
We bought the plot of land outright and coupled with what he put into the house we currently have around almost 300,000 pounds invested in it.
We are now in the process of suing the architect, builder and technician but have found out today it will be at least TWO YEARS before we even get an initial court hearing.
On the advice of our lawyer we have not told the bank about the problems at the house - he says the bank would have looked to reclaim the difference in the mortgage given and the current value of the house.
But we are now in a position where we can no longer afford to keep paying the mortgage on the property and also rent a property in the UK - especially when we have no idea if or when this will eventually reach court and even if we will be successful in our claim.
We are on the brink of handing back the keys and walking away - and thus losing everything!
Any advice or feedback or suggestions greatly received!
Much appreciated
Alan

Sorry to hear how things have worked our for you!
I'm afraid though that just handing back the keys and walking away won't solve it, you will still owe the debt to the bank, which I'm sure they will pursue and no doubt add interest to.

Hi
Thanks for replying.
I fully expect the bank to chase the debt but what other choice do we have?
We have been left in a nightmare situation - none of which is our doing.
The builder, architect and technician are accepting on blame and continue to work.
In the meantime we have been forced to uproot three children all under 6 years old and return to the UK with nothing.
I am currently working every hour possible to pay a mortgage and also keep a rented house in the UK
We previously asked the bank to review our mortgage which they agreed to do for 12 months - so long as we paid them 6000 euros for the privilege and then agreed to our mortgage rate being increased by one full per cent after the year was up.
We followed every rule and regulation to the letter but are now being fighting the Spanish system in a bid to get the justice we believe we deserve.
It is a disgrace!

Hi Alan73,
I totally sympathise with you plight. My husband and i left Spain 2 years ago and are now trying to make a life in Canada.
When I saw the title of your post i just knew you were talking about the Costa del sol!
We still own our property and have reduced the price by 200,000 euros and just hoping for a buyer before we too throw in the towel.
Chin up at least you have you family.
Angela.

I so sympathise with your plight. Especially with a young family.
It just shows how easily a good situation can turn bad .....for anyone.


If your debt is with a British Bank, and now you live in England, can you not use a voluntary debt agreement in order to hold on until the problem is resolved? Or at least until your property has a greater value. After all it is at it's worst level value wise at the moment. Both because of the state of it, and because of the recession.
You may be able to get the interest frozen??
Just handing back the keys will leave you with the biggest debt of all.
I think biting the bullet and talking to your bank again might be the best course of action for you. They must have heard this one a thousand times and have procedures which might help. Maybe there are bankers on the forum who know? The bank won't benefit from owning your 'wreck' and you being unable to pay a huge unmanageable debt.
All they could do is reposess, and sell at the most knock down price possible, leaving you with just as big a debt as you have now.
Warm thoughts and best wishes.

Firstly, sorry to hear your plight.

You must talk to your bank. You don't need to tell them the full story if you don't want but you could start by asking them to give you a 'mortgage holiday'.

I know of a couple of people who have done this and the banks have agreed to either stop any repayments for a while or to vastly reduce the payment.

I was also quite shocked to hear how much you are paying monthly. Friends of ours borrowed 280k euros and only pay 400euros interest per month!!!! Perhaps this figure could be reviewed with a view to it being made more competitive.

Best of luck.

Very sad indeed, I can imagine how you must feel, but unfortunately not unheard of in that part of the world. The TV programme makers are always looking for people like you (Homes from Hell etc), try them, at least they maybe be able to highlight your case, pay you some money for your story. This is a year old, so might have changed, http://newhomeblogs.co.uk/blog/itv-h...ell-needs-you/
It's not an ideal solution, and certainly no guarantee of success, but given your awful position, I'd try anything.

Not a nice situation, but if you took out a mortgage did you not have to take out insurance too? If so will that not cover you for the house falling down?

Alan ... I am so sorry to hear of your situation. The previous posters are correct in saying that you cannot just hand in the keys and walk away ...

However, I feel you should probably discuss this with your bank. Presumably they lent you the money to buy the plot and have the villa built, and it is normal in this situation for the bank to release the funds in 'stage payments' when the relevant building inspections have been done and reported to the bank. For example we borrowed 100,000€ from a Spanish bank to build our villa and they released an initial 25,000€ once we proved we owned the land (for which we paid cash from our UK savings), a further 25,000€ when the foundations were in and had been inspected and passed, another chunk when the walls were up, yet more when the roof was on etc., etc. Each time the building had to be inspected and a certificate issued.

Presumably the villa did not come with a 10 year guarantee on build-quality or anything like that. If the builder is still building it should be possible to get the problems resolved. I agree that pursuing him through the courts is likely to be a very lengthy process. Some friends put down a deposit on a new apartment in Javea (20,000€) only to find that when it was actually built it was higher than the plans allowed for there they could not get a Certificate of Habitation. They tried to reclaim their deposit, but two years later, and many frustrating trips to Spain to attend court hearings where the builder just doesn't turn up, they are no closer to getting a refund. I understand there are people living in the apartments still on 'builder's supply' since they cannot be officially supplied with services ... another horrible mess.

Wish you all the best and hope that something can be done. I cannot help but think that the bank that lent you the money on a new-build might be sympathetic?

ITV is actually looking for stories for a new round of 'Homes from Hell'.

Dear..., I'm a researcher with ITV1. We are currently looking for British people willing to share their stories with viewers of "Homes from Hell", due to be broadcast in spring 2011.
At least one hour will be devoted to the stories of British people who have moved to Spain and encountered serious property related problems.
At this stage we're not discounting stories of any sort. But we are actively looking for the most shocking Ley de Costa stories and those concerning land grabs.
Through these individual stories we hope to make viewers here in the UK aware of the wider issues at stake and also the best ways to avoid the potential pitfalls of buying a home in Spain.
People chosen to have their story featured will benefit from the publicity that is generated by millions of ITV1 viewers being made aware of their plight.
We will also be working with a group of experts (lawyers, surveyors etc) whose role will be to inform viewers and home owners alike exactly what their problems are how to go about fixing them.
Thanks for taking the time to read this email, I will respond to everyone who gets in touch.
Best, Anabel. [email protected]

A similar and previous piece, 'Paradise Lost', a program on Cantoria in Almería is here and here (part II) - dubbed into Spanish (but never, of course, seen on Spanish TV...).

On mortgages in Spain - see this worrisome article in the New York Times, 'In Spain, Homes are Taken but the Debt Stays'.

I have a report somewhere that says that it is law that houses new built now have to have insurance unless (I think) its a self build. Trouble is, if they dont supply it then your only option is to go to law

Should be compulsory reading for anyone contemplating taking out a mortgage in Spain. All right in the good times, sounds horrific when things go pear shaped.

So ...... what happens in the UK when you default on your mortgage payments and it gets to the point when the bank takes the home?

You do not give fuller details of your finances overall but you may want to consider taking professional UK insolvency advice. Don't just go to one of the firms that advertise "Be debt free in a year!" or similar - a reputable, licensed Insolvency Practitioner, your local CAB Money Adviser or a chat with your local Official Receiver. All the best

Of course you need independent advice, but as you mentioned, your Spanish bank may not be the best people to approach in the first place. Your Spanish mortgage seems very high for youngish people and would put the value of your house, on my limited calculations, at something like 650K minimum if everything else was OK. (I’m working on 300K put in and 350k borrowed).

After as much legal and independent advice as you can find, there may come a time to sit down quietly with a large sheet of paper. Asset values will be a problem, but the rest is easy (and cruel).

It’s merely income versus expenditure over a reasonable time span.

The answer should be on that piece of paper.