Spanish bank eviction policy - repossession insanity

[Perikles]

The stupidity of the situation never seems to end. Here is an article about a woman who is broke and living in shared accommodation after having lost her apartment to the bank after arranging a 'dación en pago'. And guess what - the ayuntamiento has sent her a bill of 2,900 euros for plusvalía, a tax payable by a vendor on selling a property. Just what she needed.

[Guanche]

Wow that a massive amount for a plusvalia. I think the most we have ever paid is about 600€

[Janet]

Lately, the plusvalias I've been involved with have been nearer €1,500-€2,000 

[Guanche]

It's based on the sale price of the house isn't it Janet? They must have put the % up. A lot!

[Janet]

Not really, G. It's a tax on the increase in assessed value of the land on which a property is situated during a vendor's period of ownership. It's calculated on the surface area of the plot together with the difference in its Valor Catastral between the points of sales.

[Janet]

Madrid has approved a Decree-Law to protect mortgage debtors which will see a "social housing fund" created to help people who have lost their home acquire a rental property. The new law also legislates for the stoppage of evictions for two years for those with income less than three times the minimum wage index (this is some €1,600 per month, an annual income of €19,00), and who have large families or children under three years of age, or disabled or dependent members, or who are unemployed.

Deputy PM Soraya Saénz de Santamaría said that the social rentals will have low prices, and explained that the Government will undertake widespread dialogue during the legislative process for the new decree. Economy minister Luis de Guindos said that the properties for social rentals will come from those repossessed by the banks. One can't help but wonder why those in mortgage arrears can't therefore stay in their own properties and pay rent to the banks instead of going through the repossession process in the first place! At least, however, people in such straits will now be guaranteed a roof over their head. JA

[Perikles]

El País reported this morning that the general opinion is that these conditions are quite difficult to meet and most people in difficulty would not qualify. They also point out that none of the three recent suicides would have been protected under these new conditions.

[Janet]

Mayor Bermúdez of Santa Cruz is keeping the pressure on the banks and wants to force them to accept the Ayuntamiento's new Mortgage Mediation Service which will come into force on 15 December. Not only that, but he will require the banks to pay half of the costs incurred by the lawyer provided by the council to those in mortgage difficulties, on the grounds that mediation brings benefits both to householder and bank alike. Since the Ayuntamiento itself will pay the other half of the legal fee for those who cannot afford it, the mediation will therefore not cost many affected individuals anything. The mayor said that it gave the banks an opportunity to recover some of the reputation they had lost. I like this guy!

The agreement between council and College of Abogados was signed yesterday by Mayor Bermúdez and the Dean of the College of Abogados, Víctor Medina. From 15 December, a telephone number will be available for those in difficulties with mortgages; the Ayuntamiento will then contact the College of Abogados to assign a lawyer to their case. The public will also be able to go direct to the Viviendas Municipales offices without calling first. JA

[Delderek]

That is possibly a softer approach than the UK. In the UK Court cost are added to the re-possession costs of the lender, and then added to the outstanding amount of the mortgage. In the event of a sale by the lender, any shortfall including those costs are still owed by the borrower.

[Janet]

The banks are still at it ... and so is Mayor Bermúdez, who is now threatening BBVA that Santa Cruz Ayuntamiento will close the municipality's official accounts with the bank unless it stops eight threatened evictions. The mayor, and finance councillor, Alberto Bernabé, have also demanded explanations from the bank as to why it has not complied with agreements adopted in November to resolve another three such cases of mortgage defaults due to unemployment.

The mayor's action comes as yet again tents have been pitched outside both Bankia and BBVA in the capital, with the Plataforma de Afectados por la Hipoteca de Tenerife accusing the banks of deception in the case particularly of two of those affected who are trying to negotiate their way out of their situation. The action group say they won't be moving their camp even if it means seeing in the new year on the street. Meanwhile, only one bank has joined the mayor's Mortgage Mediation Service, but that is, at least, one bank more than none! The bank is Cajasiete Caja Rural. JA