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Non-payment of a mortgage: How to stand up to the bank in Spain

  1. Concurso de acreedores
  2. Non-payment of a mortgage: How to stand up to the bank in Spain

Like all offices, clients requests come in everyday relating to clients who are managing mortgages or on the point of foreclosing one. Faced with the huge amount of remedial information, everybody thinks that it´s the easiest thing in the world to get the bank to keep the capital or come to an agreement. But despite the fact that every day they are more disposed to negotiate, it´s still difficult and complicated.

The first thing to evaluate is the situation of the mortgage; whether it has been left unpaid or not and if there is any remote possibility of it not having been paid through lack of resources or because of accumulation of debts on the property owing to non-payment of other loans. For example, if the car loan has not been paid, then this agency seizes the flat, which has supposedly been mortgaged twice. It will also depend on whether the mortgagee has solvent guarantors or not. If he has guarantors who can pay the loan, then obviously this will be more complicated.

All these important variables can make negotiations with the bank and the search for a solution easier or more difficult when there are a number of closed options, but which can be as wide as the circumstances or, as the different elements demand. And according to the circumstances, by agreeing the default of the principal´s payment in order to reduce the quota getting the bank to keep the property and agreeing to a rental contract with an option to buy, and urging the bank to accept it so as to gain access to the property at a reasonable price once the bank has awarded it – and other more complex actions which can achieve the final objective of not losing the property as well as the bank not having to retain the property within its assets anymore.

As usual, the important thing in these matters is to have good advice which allows you to look for the best solution for both parties with the bank as a whole making you understand that the bank isn´t always bad and that it also has to defend its legitimate interests. The search for radical options in negotiations never usually ends up with a good result. On the other hand, be clear about what is the possible meeting point, facilitate it and make an agreement.

See you soon!

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