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View Full Version : Help - Adviçe Needed on Handing Back Keys to a Bank



tazbfd
13-07-2011, 18:04
can anyone tell me what would happen if I gave the keys back to the bank on my apartment and moved back to UK ??

TenerifeTeddy
13-07-2011, 21:50
IMPO, Unfortunately I believe the bank would reposess the property and put it up for sale, if they fail to sell it for less than the mortgage and legal fees outstanding , then you would still legally be liable for any loss incurred by the bank.

I believe that there is legislation being considered that would mean that handing back the keys would be sufficient, but the banks are fighting it hard.

I am sure there are members here who know more about this, and they will be along, and can give more detailed information.

CIM
13-07-2011, 22:05
It is called a "dación en pago" and used to be quite acceptable to the banks but they are now quite reluctant to increase their book as they have loads of properties that they have taken ownership of and lots more in arrears. There is a good amount of information on dación en pago on this website: http://belegal.com/articles/showArticle/spanish-mortgage-dacion-en-pago-handing-keys-bank

I was speaking to a bank manager last week and he said he will no longer consider it so depends who you bank with, outstanding value of the property, outstanding mortgage plus arrears, unpaid community etc.

As mentioned above, theoretically if they sell the property for less than you owe them they can pursue you, however there has been a case recently in the mainland where a judge ruled against the bank and said that the mortgage was secured on the property so the taking back of the property was sufficient (as the bank had not chosen to secure the mortgage against any other assets of the owner of the property.)

As far as I know this does not set a precedent in Spanish law though so it may be that each case would need to be heard on its own merits.

doreen
13-07-2011, 22:59
It would be a question of whether you own property in the UK - if yes, it could be targeted for the unpaid balance after sale

Check out this story :(

http://www.thisismoney.co.uk/money/mortgageshome/article-1708648/Costa-nightmare-could-cost-us-our-UK-home.html

Andy0210
13-07-2011, 23:13
I moved some things out of a house that had been repossesed, the person was telling me he owed the bank 300k on his mortgage, the house was sold at auction which took place in a closed courtroom and time and date not made public.

The bank bought the house for a euro as there was nobody else there to bid on it apart from the bank and he was now liable for the remaining balance of 299.999€

christa
13-07-2011, 23:22
I moved some things out of a house that had been repossesed, the person was telling me he owed the bank 300k on his mortgage, the house was sold at auction which took place in a closed courtroom and time and date not made public.

The bank bought the house for a euro as there was nobody else there to bid on it apart from the bank and he was now liable for the remaining balance of 299.999€

OMG...this sounds very scarey. Closed auction??? do you mean that no-one can advertise their property if and when it comes up for auction? But I guess by this time the bank has already taken possesion so they can therefore do what ever they like. very scarey indeed if you are the owner.

CIM
13-07-2011, 23:27
I moved some things out of a house that had been repossesed, the person was telling me he owed the bank 300k on his mortgage, the house was sold at auction which took place in a closed courtroom and time and date not made public.

The bank bought the house for a euro as there was nobody else there to bid on it apart from the bank and he was now liable for the remaining balance of 299.999€

What was the value of the house? They have to have a recent valuation.


OMG...this sounds very scarey. Closed auction??? do you mean that no-one can advertise their property if and when it comes up for auction? But I guess by this time the bank has already taken possession so they can therefore do what ever they like. very scarey indeed if you are the owner.

I get these from time to time and have 21 days in which to sell them after which they go to auction. Difficult to get buyers who can move quickly with cash though.

TIS
14-07-2011, 00:15
What was the value of the house? They have to have a recent valuation.



I get these from time to time and have 21 days in which to sell them after which they go to auction. Difficult to get buyers who can move quickly with cash though.
Have you got any 2 bed apts at the moment. I have a cash buyer that could move in 21 days, if the deal was sweet enough and surely for htose thinking they are forced to give the keys back, if their only option is then for the property to be sold for 1€ then they must do better getting 50k or 60k from a sale that surely most estate agents would snap up. Clearly the system does not work to anyone favour here, except the buyer!

CIM
14-07-2011, 00:17
Send me an email and I can see. Stick as much detail as possible on criteria.

TIS
14-07-2011, 00:20
Send me an email and I can see. Stick as much detail as possible on criteria.
Ideally 2 bed, 2 bathroom in Golf del Sur, Amarilla Golf area, not ground floor, not in a large residential block, with community pool.

timmylish
14-07-2011, 02:39
As with all of these postings concerning Spanish Law/ Mortgages /Banks etc to make an educated guess on the likely outcome yolu really need a lot more information.
To clarify.The one referred to in the newspaper does not explain IF the couple had made reference to their home in the UK when applying for a Spanish Loan. They may well have forced the couple to make a second charge against the UK house. In that case the bank would be perfectly entitled to recover in the UK.
As to the O/p well if you did just give the keys in, pray tell me what the Spanish Bank can do if no property is owned by her or if she has no other major assests. You cannot get blood from a stone! Even in to-days climate.
Try not to worry. It wont help. And if anybody tells me its alright you saying that well, yes it it and its true.

blue marlin
14-07-2011, 06:36
from my experience
Before I came back to the UK I informed the bank and asked for a few weeks to get sorted (they had closed my account for some reason by this time) they were fine with this, how ever email after email and my sending copies of this that and the other and asking for an account number where I could pay, I got no response at all week after week I tried I even sent faxes to Main Head Office of said bank in Mainland Spin but Nada the last time my daughter went to stay with friends she popped up to the place and it was empty of all my belongings
What hurts me most is that it was not for the want of trying on my behalf just seems that they could not be bothered

doreen
14-07-2011, 07:40
Have you got any 2 bed apts at the moment. I have a cash buyer that could move in 21 days, if the deal was sweet enough and surely for htose thinking they are forced to give the keys back, if their only option is then for the property to be sold for 1€ then they must do better getting 50k or 60k from a sale that surely most estate agents would snap up. Clearly the system does not work to anyone favour here, except the buyer!

I don't see how you can have a sale before the bank takes it back, if there is not enough to clear the mortgage due - no notary can sign unless the bank agrees.

TOTO 99
14-07-2011, 07:42
As Timmylish rightly says, they can't take off you what you haven't got. The people in Doreen's link are sat in a 300k house. If you're going back to nothing then there's very little to persue but obviously the link shows that they can and will chase the debt. I very much doubt that anyone on here is going to tell you to go ahead with doing a runner but it sounds to me like you've probably already made your mind up? I hope it works out for you. You're not the first and you won't be the last.

tazbfd
14-07-2011, 08:30
Thanks Teddy!
This is more or less what I thought but any advice is grreat.
Taz

Added after 6 minutes:

Thanks a lot will have a look at the website. I am thinking of returning to the UK and do not own property I am scared that I would be pursued there, but as I have no assets would I have to declare myself bankrupt? It is a horrible situation at the moment I am not in arrears and am up to date with community HOWEVER the complex I am on is going to the dogs no water in the pool for over 2 years and plaster falling off of the walls, my apartment however is lovely... I think I am the only one paying ( well almost )any fees and I am in negative equity as far as selling goes. Just feel like handing keys back and stoppiing throwing my money down the drain.

Thanks again
T

Vivy
14-07-2011, 08:36
What I'd heard about these closed bank auctions is that the bank manager will notify a friend who then snaps the property up for a bargain price always much lower than the balance left owing on the mortgage. But for it to be sold for 1 euro is ridiculous and surely if it was the bank that bought it, I'd have thought the original owner has a good case in court.

Basically it's daylight robbery and in my mind the way the banks carry on these days is outrageous. On the whole their practices are no more than legalised (and in some cases illegal) theft.

I seriously think people are better keeping their money under the mattress now. At least if you do get robbed it's probably by someone poorer than yourself who needs it!!

atlantico
14-07-2011, 09:29
also depends upon the bank you're with, national or regional (Caja).

I know someone who thought they could just hand back they keys with a €90k mortgage outstanding . . . . but it was with Santander, and they just gave the responsibility for pursuing to a UK branch . . . . . for €140k. Included loans, credit cards and back payments due on all 3 over 2 years !!

You can run, but sometimes not hide !

timmylish
14-07-2011, 11:19
Personally I would never make myself Bankrupt. Always let someone else do it 'cause it costs money!
Don,t know bankruptcy laws nowadays but I do seem to recall that it may only last one year. Not a long time. When finished you are like a new born baby!
On the matter of Community fees why on earth are you the only one paying. Stop immediately. Don,t do anything fraudulent but do retain as much cash as possible in your own possession. I will be accused of offering bad advice on this but this is what others are currently doing.

doreen
14-07-2011, 11:26
I had to go to my bank today and asked the Manager for her opinion on this ... she said talk to the bank ... many are accepting back properties, especially the Cajas and Banesto. If they are agreeable to take the property, a deed will be drawn up and has to be signed in front of a Notary.

Most banks are not opting to pursue debtors abroad, though they can, due to the costs - obviously Santander now has quite a presence in the UK, so this might not apply to them.

If you do just disappear without formalising things with the bank, your credit rating will be forever ruined in Spain - you will not be able to open an account here etc.

Go talk to your bank - and maybe bring someone like member goldenmaniac (long standing Gestor) with you to hold your hand :)

CIM
14-07-2011, 11:32
Thanks a lot will have a look at the website. I am thinking of returning to the UK and do not own property I am scared that I would be pursued there, but as I have no assets would I have to declare myself bankrupt? It is a horrible situation at the moment I am not in arrears and am up to date with community HOWEVER the complex I am on is going to the dogs no water in the pool for over 2 years and plaster falling off of the walls, my apartment however is lovely... I think I am the only one paying ( well almost )any fees and I am in negative equity as far as selling goes. Just feel like handing keys back and stoppiing throwing my money down the drain.

Thanks again
T

Probably your best option. Go to the UK. Let them know you are there and if they want to pursue you - let them. Then got to citizens advice bureau (do not go to any private debt management companies or consultants...) they will look at your situation and give you the best advice on moving forward. It may be bankruptcy, it may be an IVA (bankruptcy is gone after one year and IVA´s can also be quashed after a year.) It will affect your credit rating in the UK but you wont have any credit history in the UK anyways so it will make little difference.
The bankruptcy/IVA will stay on your credit file for 6 years after which - clean bill of health. This is probably the best route to take in your situation if the mortgage is more than the value of the property.
If you like, pm me the property details and I´ll tell you what it could realistically sell for - unless you are positive there is no chance of selling and clearing the debt. If there is then the bank may take it.

Suej
14-07-2011, 11:47
Thanks Teddy!
This is more or less what I thought but any advice is grreat.
Taz

Added after 6 minutes:

Thanks a lot will have a look at the website. I am thinking of returning to the UK and do not own property I am scared that I would be pursued there, but as I have no assets would I have to declare myself bankrupt? It is a horrible situation at the moment I am not in arrears and am up to date with community HOWEVER the complex I am on is going to the dogs no water in the pool for over 2 years and plaster falling off of the walls, my apartment however is lovely... I think I am the only one paying ( well almost )any fees and I am in negative equity as far as selling goes. Just feel like handing keys back and stoppiing throwing my money down the drain.

Thanks again
T

Hi tazbfd, there is some sound advice on this thread from people you can trust are right, what ever you do don´t be tempted to run away from the problem easy done when you´re stressed, once you have taken that first step to sort it out it will not seem so bad, whatever you do try not to let the situation escalate beyond control. I´m sure you will be able to find solutions to your problems and above all try not to worry it doesn´t solve anything!
Good luck!;)

timmylish
14-07-2011, 11:56
One thing I wish to make very clear to the O/p. This is the year 2011 and not, say fifty years ago when bankruptcy/divorce and the like were considered to be a sign of incompetence or worse. Don,t know the current figures but at a guess I would imagine that something like 20% of the UK population have been made bankrupt! There is no stigma about it nowadays. I tend to disagree with CIM on the question of IVA because you are required to make a complete disclosure of your financial position and therefor you would be committing fraud if you tried to hide some money. I would just sit back and let the situation take it own course of action but meantime, keep all your cash in cash not a bank/building society etc. From the minute you hand over the keys please, please don,t involve yourself in anything which may appear to be fraudulent. Good luck and keep your chin up. You are one of millions (does not seem so serious when you put it like that!)

tazbfd
14-07-2011, 12:25
WOW thanks you so much Doreen that has put my mind at rest a little. I have never ever defaulted on anything in my life, left the UK with a clean record and pay everything here, am totally legal at work as well here and pay my taxes. I wouldnt just disappear as I would feel like I was forever waiting for something bad to happen.
I will speak with the bank (it is a Caja ) and hopefully I can resolve this .
T

Added after 2 minutes:

Thank you Sue.
It is very easy to lie awake and panic but as you say that doesn;t solve anything I will go through proper channels
T

Added after 4 minutes:

Hi
would it be possible to private message me goldenmaniac contact details please.
T

blue marlin
14-07-2011, 17:56
I know someone who thought they could just hand back they keys with a €90k mortgage outstanding . . . . but it was with Santander, and they just gave the responsibility for pursuing to a UK branch . . . . . for €140k. Included loans, credit cards and back payments due on all 3 over 2 years !!

You can run, but sometimes not hide !

Santader just say to me that they have no connection with the Spanish side :confused:

tazbfd
26-07-2011, 13:23
Can anyone tell me how easy it is to ask the bank for a dacion de pago? If my property is in negative equity and I cannot pay the mortgage what is the answer if they refuse??

How quick can a dacion de pago be done.

atlantico
26-07-2011, 15:38
I understand that this can only be done if the property is in positive equity, and over a certain percentage of what money is outstanding/owing, but may be wrong !

A very important thing to know is that the Bank cannot deny a dación en pago without proper justification and that if so, you can ask for judicial help.

read more here at belegal.com (http://belegal.com/wordpress/dacion-en-pago/)

casabonny
26-07-2011, 15:46
had never heard of this and hope that the information may be of help to some others in the future as i can unfortunatly only se e things getting worse.Good luck to the \OP.

CIM
26-07-2011, 16:49
There is already a thread running on this subject started by the same OP here:
http://www.tenerifeforum.org/tenerife-forum/showthread.php?5997-Help-Advi%E7e-Needed-on-Handing-Back-Keys-to-a-Bank&highlight=dacion+pago

TenerifeTeddy
26-07-2011, 16:58
There is already a thread running on this subject started by the same OP here:
http://www.tenerifeforum.org/tenerife-forum/showthread.php?5997-Help-Advi%E7e-Needed-on-Handing-Back-Keys-to-a-Bank&highlight=dacion+pago

Threads merged