negative equity/repossession
 

i bought a house in spain two years ago and am now in negative equity. i don't have much capital in the property as i took a 110% mortgage. the house is now empty and i am living in south america. the question is if i were to stop paying the mortgage and wait for the house to be repossessed what would happen? i don't have any assets in the uk apart from a bit of money in a savings account. would my spanish lender be able to trace me through credit checks in the uk? if so would they be able access that money by going through the courts?

Re: negative equity/repossession
 

Under EU regulations Spanish lenders can pursue outstanding mortgage-related debts against assets in the UK,And ignorance is no defence, so you can’t argue you didn’t know you would be liable in the UK That is the law not me speaking.I would urge second home owners in a like state to take note of those EU rules.In the circumstances you give ie let the bank swivel for its cash I would expect the bank to repossess the house and auction or sell it to the bank managers sister in law for a fraction of the outstanding mortgage. They will then sell on the debt to a debt collection agency who will take steps to find you.You will owe all monies plus interest/expences that do not meet the full outstanding debt.Just because you give the house back the debt does not go away. These agency's have world wide branches so that money in the UK could have a charge put over it if they found it though the 3 credit ref agency's in the UK. The chances of you being found in South America are not as hard as you think, If traced they could sell on the debt to another collection agency in that country who could put an attachment of earnings order on your salary if you work or put a charge over any property you now own. The bank here in Spain could research your mortgage application and if its found there were untruths in your application could report that matter to the Police as a Mortgage fraud and get around a lot of hassle that way. There are such things as a European arrest warrant for fraud. The bank managers here in Spain have been told not to repossess but to arrange with the client a payment programme or extension to the mortgage during these hard financial times why don't you do that and then rent the house out. I have just mentioned the various things that could with a small c happen there are so many cases such as yours at the moment I would think the file would be at the bottom of an in tray for years.The matter if legit mortgage application etc is a civil debt it only becomes a criminal matter if in your application you have made untruths that if known to the bank they would have refused a mortgage in the first instance. However just to be on the safe side do not return to Spain if you decide to go deep deep under cover . The UK may also be waiting for that first opening of a new bank account or loan application then bang the debtors will have ya. My advice stay where you are get the money out of the UK and Rent in future.One final word of warning. Anyone struggling to pay the mortgage in Spain should be very wary of refinancing solutions that sound too good to be true. In times of distress like these, scams that prey on desperation abound. They nearly always leave your worse off than you would have been dealing with your original mortgage lender. :eek:

Re: negative equity/repossession
 

All the way through this global banking crisis, Spanish ministers and heads of all the major banks have boasted that Spain is perfectly safe - because never at any time have any Spanish banks loaned more than 80% of the value or 80% of the sum paid - whichever is the lesser amount.

I can't, therefore, see the bank manager, notario or valuer putting their hands up for a 110% LTV mortgage - especially with jobs on the line!

Queteden's safest bet would be to seek some good legal advice, I think!

Re: negative equity/repossession
 

Depends on your long term plans, if your staying in S America you could transfer your savings over there and then declare yourself bankrupt in the UK and Spain ,theres nothing anyone could do after that point, the only thing is any credit rating you had would be stuffed , I would not normally suggest this but if its only the bank you owe then who cares about them? I also understand that if your creditors dont / cant contact you for six year they can no longer persue the debt .

Re: negative equity/repossession
 

the story of my life.

Re: negative equity/repossession
 

That is true Rotor but you must not admit the debt by any contact in letter e-mail or telephone. Once the six years have past Should the creditor fail to maintain contact with the debtor, for a period of 6 years or more, it is possible to claim that the outstanding debt is "Statute Barred" under the conditions of the Limitations Act 1980.

The Limitations Act 1980 also has additional effects, depending on the type of debt in question.This is only applicable in England and Wales.....Not Spain :blink:

Re: negative equity/repossession
 

There is a good article on this here:

http://www.spanishpropertyinsight.com/buff/?p=44

Some of the text may sound familiar.

Re: negative equity/repossession
 

ha tell that to mr nasty mob who have purchased the dept and will gladly stick a gun to your head 15 years or so later.and want the interest on it

Re: negative equity/repossession
 

has this actually happened to you or do you just watch a lot of telly?

Re: negative equity/repossession
 

thanks for the link...and yes, quite a lot of it sounds familiar. plagiarism is fraud too, right?

Re: negative equity/repossession
 

banks. taxman.morgage ect will let go.some finance cos will let go.but some fince cos sell the dept on to reputable collectors who after a long while let go and sell the dept on again.some times to a real unscrupilus bunch .(when I say a gun to your head I dont mean a gun with bullits.Its a figure of speach)
the CSA are the equivelent.or the the poll tax.you may have dodged them maney years ago and moved on but say one day when you try to rebuild your life then they catch up with you and its a gun to your head.pay up or go bust or put a charge on your property or get a loan.but we will get our money one way or another.
but in your case I woulnd lose any sleep over it.just move your money .and if you have no uk assets even better.the worst case is they could make you bancrupt in your absence but let them do it or you will have to pay to declare yourself bust
if you have a wife.or if not a sister/brother just get a second credit card.your name there account.and if your are working use there account to get your wages in.

Re: negative equity/repossession
 

I doubt they will make you bankrupt in the UK if you have no assets, it will cost them around 800 pound to do so ,pointless if you have nothing, you will have to pay for it yourself, once this has been done no one can persue you for any debts in the country where you are bankrupt,

Havent got a clue how it works in Spain,anyone?

Rgds

Rotor

Re: negative equity/repossession
 

they do because they claim it as a taxtax loss on the dept.Im not sure if its a minimun amount.or they can go for payments a pound a week if you sighn on

Re: negative equity/repossession
 

I really only think that poshnbecks is trying to inform. I do wish he
would post the links though, after all, how many hints does he need from Beachcomber?

Re: negative equity/repossession
 

Yes, or credit the source. Anything but trying to pass it off as your own intellectual property.