Do you want to leave Spain but you cannot sell your property because of the current market price? Are you unable to cancel your mortgage? Are you thinking about giving the keys back to the bank?
We give you the keys in this blog.
The collapse of property prices has prevented many owners from selling their properties as the sales prices have been unable to cover the outstanding mortgages. Some mortgages are changing from interest only payments to include capital repayment as well, which will have an impact on future payments.
If you are considering returning keys to your mortgage lender you should be aware that they can take legal action in the UK to recover the debt. There is however a legal way to proceed and leave your unpaid mortgage and ownership behind, with no comebacks….
DACION EN PAGO has become the best solution for those owners who want to return their property to the bank (whether or not they are resident in a Spanish territory).
This legal process requires the assistance of a solicitor who will study your case and will inform you about the best way to proceed depending on several factors such us your personal circumstances, banking entities, mortgage debt, recorded valuation on your mortgage, etc.
You should be aware that:
– Under certain circumstances, you can return the keys to the mortgage lender and free yourself of this obligation. It is essential to follow the correct legal processes.
– Spanish Law is very severe and helps banks to recover the mortgage debt of clients who abandon their properties and mortgage obligations, so it is better not to look the other way and leave without considering the consequences.
– Your credit rating and assets in UK will not be affected if you follow Spanish rules and processes.
– DACION EN PAGO (Cancelling a mortgage contract and return property to lender) has become very popular in the last few years as the best way to solve a problem that affects a great number of people in Spain.
– Once DACION EN PAGO is agreed with the bank, it will be legalized in front of the Spanish notary and these deeds will be recorded at the Land Registry. The deeds will be proof of the cancellation of the mortgage and ownership of the property.
– Even if your Spanish property is going to be re-possessed as a result of a foreclosure process, there is a solution for your case. When the Bank files a lawsuit for legal repossession to recover the mortgage debt the recorded value of the property at the mortgage deeds are used to determine how much the property is worth. As part of the process there will be a public auction. If no appropriate bids are received then the Bank is obliged to take the property at 60% for Spanish resident, and 50% for non-resident. This shortfall can be also negotiated in order to write it off.
Our professional specialty is to enter into negotiation with banking entities and to return the property to the bank as a full payment of the outstanding capital of the mortgage, releasing the client from any liability and debt and ensuring their best interests and benefits.
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