Yes you can. In fact, banks are forced by law to provide to their clients such binding offer, listing clearly and unequivocally what are the basic terms of the Loan & mortgage with time enough in advance of the meeting at the Notary. for the “Escritura” to be signed These basic conditions and terms include: Interest rate, commissions, charges, penalties, early redemption fee, cancellation fee, insurance requests, etc
Spanish bank agent Bancaja Habitat is attracting foreign buyers to its repossessed property stock with 85% loan-to-value mortgages.
Bancaja has sold around 40 units in the last three weeks to foreign and domestic buyers, who don’t have to start repaying the mortgage for three years.
The reluctance of Spanish banks to lend to foreigners at high loan-to-value rates is seen as a major obstacle to clearing the backlog of unsold and repossessed property in tourist areas. The number of new housing loans issued in Spain last year fell by 22%.
Since the start of the year, several banks have begun offering better mortgage deals and as much as 100% loan-to-value but often tied to specific developments.
“We’re still at a stage of the crisis where more stock is coming onto our books and the numbers are going up,” said Miguel Martínez-Mariño, country manager for Bancaja Habitat in the UK. “We have to take the initiative and ask what we can do to sell.”
So far most sales have been made in Spain, where the company has launched a nationwide advertising campaign across TV, radio and newspapers. But the agent is now hoping to attract to more British buyers and is also offering the deal through its Scandinavian offices.
Martínez said the mortgage offer had a positive reaction at last week’s A Place in the Sun exhibition in London. “We had around 70 enquiries and the majority of people were looking for finance. Their initial reaction to our deal was to ask ‘where’s the catch?’ They couldn’t believe it.”
Source: OPP
Yes it could. It is quite normal that the bank made you sign a document saying that the repayment of the loan originally given to you was protected with the mortgage on the property but also with your personal guaranty, meaning you could be forced to pay the due instalments if the bank chooses to claim these from you instead of repossessing the property, or even in case where the repossession does not cover the debt outstanding.
(From OPP News)
Buyers in Spain could be able to secure 100% mortgages for the first time during the downturn thanks to a new developer-bank partnership.
Customers buying from UK-based developer Almanzora Group will be able to apply for 100% loan-to-value finance through the Bank of Andalusia on properties with discounts of up to 55% off peak price.
The developer has been selling around three properties per week since the start of the year and hopes the new mortgage offer will provide an extra boost to the market. The large discounts make the properties more affordable and so the bank can feel more confident about buyers’ ability to repay the loan, said Almanzora’s sales and marketing manager Simon Coaker.
“In some cases, the mortgage available is larger than the amount actually payable by the purchaser,” he said. “This is because, following last year’s price reductions, current prices of a number of properties are actually lower than the bank valuations.”
Bank incentives
Although the number of mortgages issued in Spain rose year-on-year for the first time in two years in November 2009, such high loan-to-value rates have become almost unheard of in Spain due to increased conservatism among lenders. However, banks are more likely to lend to customers buying repossessed properties or from developers backed by bank funding.
“There are some 85% loan-to-value loans available for bank-owned properties but generally there is still little movement in the market,” said Clare Nessling, operations director for international mortgage broker Conti.
Coaker told OPP that Almanzora was in partnership with the Bank of Andalusia to fund certain elements of its projects, but that the bank also wanted to take advantage of the sales opportunity.
“The banks have seen us doing well and are interested in dealing with our clients,” he said. “Some of our own mortgages are with the Bank of Andalusia but they have competed against other banks for our customers’ business.”
Addressing the long-term sustainability of such large price reductions, he said: “We wanted to create real interest in the property so have allied a mortgage product to selective discounts that will incentivise the market. But we think the 55% discounted stock will sell very quickly and we anticipate raising prices hopefully by mid-year.”
In a verdict released several days ago, the Chamber of civil matters of the High Court partially admits the appeal filed by the Spanish Organization of consumers and users (OCU) against the decision of the provincial court of Madrid who had declared as valid several reported clauses in the year 2005.
Amongst the clauses now voided by the Supreme Court are the ones that exclusively penalised the owners of credit or debit cards for the damage carried by its fraudulent misuse as long as those circumstances were not communicated to the bank. The verdict establishes that “the existence of a loss or theft must be communicated without undue delay since the disappearance is known”.
However, the verdict declares that “clauses totally exempting the Bank of liability indiscriminately and without nuance or modulation are abusive” and “disproportionate”, since “there are very frequent cases where the bank’s diligence warned about undue uses and even warned users, who were unaware”.
The Court situates on the same line those clauses that exclude “whatever the case” the responsibility of the bank when the PIN or card password is obtained by coercion or force majeure.
Magistrates insist that “is noteworthy that, in certain circumstances, banks can warn undue uses using the diligence which from them is enforceable in harmony with their experience and technical resources”.
Pretext to rescind the contract
In thye paragraph about mortgages, the magistrates declared abusive those clauses prohibiting the leasing of mortgaged estates, even though they admit such deeds can decrease the value of the property. Therefore they argue that these clauses should establish how much rent must the owner demand in order to correct the “decreasing value” the lease may cause the bank in the case of non-payment of the loan and of need to repossess the property.
The Supreme Court also rejects that banks include contract clauses regarding the resignation of customers receiving a mortgage or other loans about being informed of these being transferred to another bank or entity. “Its unfairness is unquestionable” because “it implies a waiver or limitation of the rights of the consumer”, the judgment argues.
Another voided condition in the loans paragraph it the one allowing Banco Santander to compensate receivables from clients with those positive balances held in other products, even if they were not their only holders. The Supreme Court understands that this type of clause is valid only if they are “transparent, clear, concrete and simple”, conditions that the wording of the clause of Banco Santander was not meeting.
The Court also termed as “illicit” the power of a bank to resolve in advance term-granted loans when an embargo of the borrower’s assets occurs or his solvency is diminished by any cause.
In this regard, judges believe that this condition is looking for “any negative impact on the borrower’s heritage, actual or potential, can serve as an excuse” to have the contract early terminated, thus ”giving the financial institution a discretionary and disproportionate power (…)”.
Real estate property seizures ordered by Spanish first instance Courts reached 58,686 while the registered number in 2007 was 25,943, according to the General Counsel of Judicial Authority (CGPJ).