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Spanish Judge Says Giving House Back Pays Of Debt To Bank In Full

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Actually quite the reserve. It means all the British purchasers of costa homes can walk away with no come back on their main home in the UK. This is HPI positive, in the UK at least. :huh:

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So if I'm correct (didn't have time to read the article), all Spanish home owners that are underwater or can't afford the mortgage are free to mail the keys to the bank without penalty?

If so this has massive implications for Spanish banks, they'll be left totally broke (well they are anyway but this will force a show of hands very quickly). Then it's off to the govt. for bailout money, who in turn will go off the the EU for more bailout money. Print and bail, kick the can until the can becomes an international land mine.

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Actually quite the reserve. It means all the British purchasers of costa homes can walk away with no come back on their main home in the UK. This is HPI positive, in the UK at least. :huh:

Surely that depends on where they borrowed the money.

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Actually quite the reserve. It means all the British purchasers of costa homes can walk away with no come back on their main home in the UK. This is HPI positive, in the UK at least. :huh:

Why isn't it HPI positive in Spain? Price rises you win, price drops you walk away. The banks will hide the bad debts under the carpet.

It's pro-debt so another kick in the teeth for savers.

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Has this thing gone to the highest court in the land yet?

Our law on this in the UK is pretty clear, you have to pay the difference, unless you are bankrupt of course.

In Spain, you would be mad to pay if you are underwater now, even if you have lots of cash coming in. Simply walk away and buy somewhere cheaper.

Will Spain just print the money like the Irish did? It is what I would do to make up the difference.

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In Spain, you would be mad to pay if you are underwater now, even if you have lots of cash coming in. Simply walk away and buy somewhere cheaper.

Will Spain just print the money like the Irish did? It is what I would do to make up the difference.

Yes, surely this would mean anyone in negative equity would simply mail back their keys which in turn wipes away their debt? This is an inflationary policy...

Edited by MinceBalls

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Has this thing gone to the highest court in the land yet?

Our law on this in the UK is pretty clear, you have to pay the difference, unless you are bankrupt of course.

In Spain, you would be mad to pay if you are underwater now, even if you have lots of cash coming in. Simply walk away and buy somewhere cheaper.

Will Spain just print the money like the Irish did? It is what I would do to make up the difference.

What most of you have missed, is that if you walk away, you walk away from any collateral/deposit you have put in the house.

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What most of you have missed, is that if you walk away, you walk away from any collateral/deposit you have put in the house.

What you have missed is that if you are in negative equity, that collateral has already gone.

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So if I'm correct (didn't have time to read the article), all Spanish home owners that are underwater or can't afford the mortgage are free to mail the keys to the bank without penalty?

If so this has massive implications for Spanish banks, they'll be left totally broke (well they are anyway but this will force a show of hands very quickly). Then it's off to the govt. for bailout money, who in turn will go off the the EU for more bailout money. Print and bail, kick the can until the can becomes an international land mine.

Do you think you could be underestimating the "ingenuity" of our banks and governments? Now they have discovered the magic formula?

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Yes, surely this would mean anyone in negative equity would simply mail back their keys which in turn wipes away their debt? This is an inflationary policy...

Psychology is such an interesting thing. Rationally you should hand back the keys when you are badly underwater. Many will not, insteading plodding on and honouring their contract. Others will act more rationally, and hand their keys back in. Many will try to keep paying at first, but then as they see more and more people handing their keys in, they will question their own world model, and eventually change their point of view. Once they realise that they are being a bit stupid pay interest on a £400,000 mortage for a £200,000 house, they too will decide to send in the keys.

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Has this thing gone to the highest court in the land yet?

Our law on this in the UK is pretty clear, you have to pay the difference, unless you are bankrupt of course.

In Spain, you would be mad to pay if you are underwater now, even if you have lots of cash coming in. Simply walk away and buy somewhere cheaper.

Will Spain just print the money like the Irish did? It is what I would do to make up the difference.

They can still say you did that on your credit file and not lend to you again.

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Surely this should be positive for spanish housing.

I can buy a holiday home now and if the worst comes to the worst then I can post the Keys back to the bank. Eliminating the risk of being responsible for the debt if the gamble fails is bound to bring in more punters.

I should imagine that banks will start asking for some hefty deposits from now on though.

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If the bank gets left with the crystallised negative equity, I would assume they would be more responsible when lending. That said, if they banks just get bailed out, then it's more about bailing out mortgage holders, rather than leaving them with the bill.

Whether it is good/bad for HPI, depends on how the government deals with failing banks.

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They can still say you did that on your credit file and not lend to you again.

Yes, always wise to take legal action before a strategic default, and way up the affect on your credit rating.

Lending only works if the lender can inflict some sort of pain or sanction against a defaulting borrower. The sort of pain caused by a bit of a bad credit rating isnt going to deter many who could literally save themselves tens of thousands if not hundreds of thousands of pounds.

The only solution to all of this is that in future, banks will once again demand that large deposits are put down. I wonder how long it will be before the lesson of the large deposit is once again lost in a maelstrom of fraud?

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Surely this should be positive for spanish housing.

I can buy a holiday home now and if the worst comes to the worst then I can post the Keys back to the bank. Eliminating the risk of being responsible for the debt if the gamble fails is bound to bring in more punters.

I should imagine that banks will start asking for some hefty deposits from now on though.

Im pretty sure there is something odd about Spanish mortgages....the debt remains with the property if unpaid, so the next purchaser will have to take it on.

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so whats different, they have nonrecourse in the US.

shame about all that MBS backed by property security.

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The article also states that the judge basically had no right to do this and the decision will get totally binned on appeal, so don't fret.

Judges do lots of strange things. Sometimes you get judgements that are far sighted and sensible.

Other times you get judges that cant add up judging on formulas, with comedy results.

And you get a fair number of crooks as well. Except the judge can never be a crook, as they decide what the law is.

Who knows what the highest court in Spain will make of this, if it gets that far?

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...

If so this has massive implications for Spanish banks German tax payers, they'll be left totally broke (well they are anyway but this will force a show of hands very quickly). ...

Corrected for you ;)

(BTW I strongly suspect there will be an appeal against this ruling, it will be overturned, and the judge in question will be sent to the nearest correction facility)

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Judges do lots of strange things. Sometimes you get judgements that are far sighted and sensible.

Other times you get judges that cant add up judging on formulas, with comedy results.

And you get a fair number of crooks as well. Except the judge can never be a crook, as they decide what the law is.

Who knows what the highest court in Spain will make of this, if it gets that far?

Surely the highest court of law in Spain is the European Court of Law?

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Im pretty sure there is something odd about Spanish mortgages....the debt remains with the property if unpaid, so the next purchaser will have to take it on.

Yes I think that's still the case - the mortgage goes with the house rather than the owner. However these days purchasers can quickly find out what debts are tied to a house by requesting a "Nota Simple" from the Spanish land registry. Making it very difficult for sellers to offload properties that still have outstanding debts.

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Why isn't it HPI positive in Spain? Price rises you win, price drops you walk away. The banks will hide the bad debts under the carpet.

It's pro-debt so another kick in the teeth for savers.

it is like this in the US and it has indeed resulting in HPI lately... oh wait

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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