Hi all,
A very interesting case arose last week in Spain. Apparently, a couple was behind on mortgage payments and had their house repossesed.
The total mortgage was 71,225€. The bank tried to sell the house in a public auction but found no buyer. Then, the bank had a valuation of the house, which was this time valued in 42,895€. Following normal Spanish legal procedures, the bank sued the borrowers to reclaim the outstanding debt of 28,129€.
Now, is when things get interesting;
According to El Pais newspaper "The judge ruled that the house’s fall in value was a direct result of the financial crisis that stems from financial mispractice and it was "morally repellent" that the bank should make additional claims on the borrower". The brave judge also stated that 71,225€ was the value that the bank had assigned to the property when it granted the mortgage loan. So, no reasons to claim for additional assets...
www bloomberg.com/news/2011-01-27/spanish-court-rules-repossession-clears-mortgage-el-pais-says.html
www thespanishbrick.com/2011/legal-advice/first-keys-hand-over-to-the-bank-to-get-rid-off-mortgage-loan/1532
antonioguillen.co.uk/2011/01/some-hope-for-spanish-home-owners-in-mortgages-arrears/
The mortgage system in Spain is similar to the one in Ireland, where the borrower is liable to the whole amount of the mortgage, regardless of house market prices.
This was an exceptional (but isolated) case. Do you think something like this could happen in Ireland?
Cheers
A very interesting case arose last week in Spain. Apparently, a couple was behind on mortgage payments and had their house repossesed.
The total mortgage was 71,225€. The bank tried to sell the house in a public auction but found no buyer. Then, the bank had a valuation of the house, which was this time valued in 42,895€. Following normal Spanish legal procedures, the bank sued the borrowers to reclaim the outstanding debt of 28,129€.
Now, is when things get interesting;
According to El Pais newspaper "The judge ruled that the house’s fall in value was a direct result of the financial crisis that stems from financial mispractice and it was "morally repellent" that the bank should make additional claims on the borrower". The brave judge also stated that 71,225€ was the value that the bank had assigned to the property when it granted the mortgage loan. So, no reasons to claim for additional assets...
www bloomberg.com/news/2011-01-27/spanish-court-rules-repossession-clears-mortgage-el-pais-says.html
www thespanishbrick.com/2011/legal-advice/first-keys-hand-over-to-the-bank-to-get-rid-off-mortgage-loan/1532
antonioguillen.co.uk/2011/01/some-hope-for-spanish-home-owners-in-mortgages-arrears/
The mortgage system in Spain is similar to the one in Ireland, where the borrower is liable to the whole amount of the mortgage, regardless of house market prices.
This was an exceptional (but isolated) case. Do you think something like this could happen in Ireland?
Cheers