Archive for the ‘Spanish Property’ Category

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Low Rate Spanish Mortgages -Update

Tuesday, February 9th, 2010

Further to my article on yen mortgages supplied by Dominion credit I have received 2 further communication inputs from clients who have applied for a mortgage via Low Rate Spanish Mortgages.

Over the Christmas period Low Rate Spanish Mortgages pulled back their pay for click and paid for link activity but are back with a vengeance. They state 800 applications were approved last year. This is pretty spectacular as even at the height of the selling market we; who were the leading supplier of non resident loans; completed on about 500 mortgages each year. Given lack of non resident sales in Spain last year they must have cornered the whole market with no-one else lending at all!

They say they charge no fees but the feedback I have received indicates you are asked to pass an amount of money apparently for a valuation and this is payable upfront but the property is not visited a desk top valuation is done and what is considered for the valuation is not clear.

The Chief Executives house in Mexico which is being raffled in a spot the ball competition which was due previously to have the winner announced in November 2009 has now been extended to when they have 76,000 entries. At € 25 a pop, this would pull in 1.9m euros for the owner if closing date does not get extended again.. European competition laws that cover this type of competition appear to be being contravened.

Many quality websites and portals like Eye on Spain, Guardian financial site are accepting Google ads giving credence to the company.

It is amazing that no-one checks the advertisers on their website.

The solution to this surely sits with the companies that allow the advertising to be run who should undertake far more due diligence to ensure the advertiser is following European laws.

See latest feedback on Low Rate Spanish Mortgages below .
The comments from Clive Ballard are posted below.

As you say, Dominion Credit and Finance website is new, The name was only registered Jan/Feb 2009. Low Rate Spanish Mortgages were advertising the Yen mortgages in Oct 2008. The DC&F website, like the LRSM website is not very professional for the nature of what it is supposed to sell, and the office in Singapore is not an office but only a phone answering service. Like yourself I could not find any references to Henry Braithwaite in the banking world. I phoned/e-mailed him on a number of occasions in March 2009 requesting information on agents, other than LRSM for these mortgages.
I got no responce to the messages left.
Since DC&F were not contactable, and had no website until Jan 2009, I wonder how LRSM were able to offer their mortgages in Oct 2008, and purchased the domain name in May 2008.

Low Rate Spanish Mortgages charge a non refundable, 500 € to apply for a Yen mortgage.
I applied for a mortgage from them in Jan 2009, when there office was in Valencier. Approximatly 6 weeks later when I chased the mortgage, they had apparently moved to Bilbao, though were working through a UK phone answering service. When they rang back, I was told the morgage was not granted, due to the financial situation, but if I liked to apply again in 3 months (and pay another 500€) the situation might have changed.
It seems to me that the only ones making money out of this, are “Low Rate Spanish Mortgages”, a 1/2 man run business who as well as running lotteries, also run a dating site under their other company name of Marverose S.L
They also have interests in an Estate Agents (wherepropertysells.com), though I think this may now, have closed.
N.B. The original UK company named Dominion Credit and Finance went bust in the 1990′ies.

Brian McKenzie says:
January 25, 2010 at 12:17 pm

Hi.
Similar story as clive only this time they said the mortgage was not approved because the valuation was wrong,which made no sense as no valuation had been made on the property. This email stating the above information was sent to me only after repeated attempts to contact them and also they said that they had sent me an email stating this a month previous which was total rubbish. Further attempts to contact them to clarify this has been ignored. I am now quite sure after reading Clives letter that I have been well and truly scamed..
B.Mckenzie

G F Crudgington says:
February 22, 2010 at 4:46 pm

Like Bryan & Clive I have also had similar experience with Low Rate Spanish Mortgages and paid £228 for survey only to find that the survey was never done and the mortgage was refused on the basis of an “In House Valuation” made by a company Dominion Credit and Finance located in Singapore, thousand of miles away from my property in France and that the loan was below the Dominion Credit and Finance funding level. Communications have not been good. I doubt whether they will refund the money paid for a survey which was never carried out. I had hope that it was all above board but I am now convinced that it is a scam and it is highly unlikely that I will get the survey fee back.

However we have received this positive comment from a Mrs Barbara Gosling in Mexico

I read your warning with interest!

While I cannot comment on Clive’s own application, all I can say is that I found the service provided by LRSM to be of an extremely high standard. Indeed, thanks to them I am happily residing in my new property soaking up the sun.

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Tags: Low rate spanish mortgages
Posted in Spanish Banks, Spanish Mortgages, Spanish Property | 3 Comments »

Polaris World Go Bust!

Friday, January 15th, 2010

Polaris World have announced they are seeking to go into receivership.

How exactly this will affect those purchasers, whose properties have no yet been built is as yet unknown.

Each phase was funded by a different bank the key banks being

  • Bancaja
  • CAM
  • Caja Murcia
  • Banco Popular

Whilst all these banks will have provided Bank Guarantees protecting clients deposit monies most phases have now fallen outside the agreed dates for evoking the guarantee so clients may have to fight through the courts to get their money back, be offered a suitable alternative or have unit finally finished by another buyer of the whole development or phase.

If the clients lawyer did not inform the client at the point the delay on build had met bank guarantee rules, the bank guarantee may now be null and void. Any clients affected should immediately contact their lawyer to discuss their particular situation. If the bank guarantee has lapsed, changing lawyer and speaking to a lawyer from who is independent may be the most appropriate solution. There are already a few lawyers looking at class action to reduce court costs to individuals and a meeting is taking place next week W/C 18/01/10 to clarify exact situation and what action can be taken by those affected.

For clients who have already completed without golf course, hotels or facilities being in place it could be a long time before these are now developed if ever.

The Polaris developments which were dreamt up in much happier times and supposed to provide self-contained holiday villages at affordable prices will sadly have turned into a nightmare for many UK clients.

Over time these issues will be resolved and one day hopefully the Polaris vision will finally live up to its expectations. For investors it could however be a long haul.

If independent legal advice is required contact heather@imsmortages.com outlining which development phase was bought and current situation along with your full contact details. Your enquiry will be passed to a lawyer already taking action on behalf of other clients.

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Tags: Polaris World, Spanish Developers, Spanish Property
Posted in Polaris World, Spanish Banks, Spanish Mortgages, Spanish Property | No Comments »

Spanish Mortgages: A Review Of Lending December 2009

Wednesday, December 2nd, 2009

Despite the current banking issues obtaining a mortgage for buying in Spain is still available. Lenders like Halifax, Lloyds with their UK roots remain committed to keeping a presence in Spain.

Spanish banks are also still providing finance.

The key change from a couple of years ago is the risk criteria’s are now rigidly followed; pricing this being the margin above Euribor the banks charge has increased considerably and overall terms and flexibility of product have tightened. Euribors themselves remain at an all time low, which means despite margin increases rates are around 2.5%.

The majority of banks are now back to 2001/2002 loan to value criterias. This means most banks provide a maximum of 60% of purchase price and in most instances limit this also to 60% of purchase price. A few banks remain that may provide a loan larger than their percentage of valuation but they  will still have maximum limits on what percentage of purchase price this will be. 100% financing is a thing of past.

One bank is currently offering 70% of valuation to non-residents as standard and Santander via its Abbey National arm will consider 80%.

Underwriting is very rigid in current environment and some purchasers particularly those involved in the property industry in UK may find themselves precluded from borrowing however for most clients who fall within current debt to income ratios; whilst the level of paperwork required to prove affordability will be very high; a loan will still be available.

Interest only facilities for up to 5 years are available but most Spanish banks are now only offering repayment loans with terms up to 30 years.

Maximum ages have dropped with most mainstream lenders now wanting the mortgage paid off by age 70 years.

Most buyers still find obtaining a Euro mortgage the most attractive option given current exchange rates between the pound and the Euro. Many cash buyers still want to consider a Euro loan with a view to paying mortgage off when and if exchange rates recover to historical levels. Taking a currency loan remains unusual and only suitable for those clients who understand and can manage the currency rate fluctuations.

It is difficult to see banks improving flexibility, relaxing criteria’s or aggressively seeking lending in 2010 however, the market seems to have bottomed out and it is expected that current criteria’s will not worsen in the next 12 months.

Posted in Spanish Banks, Spanish Mortgages, Spanish Property | No Comments »

When Can You Buy Distressed Property In Spain?

Wednesday, November 18th, 2009

When buying a distressed property in Spain you have a number of points at which you can try to secure the property.

The first point is when the current owner is experiencing difficulties but before the bank starts any action (where a mortgage is involved). The owner may be willing to drop price significantly to avoid repossession being instigated particularly if they are a Spanish Resident.

The second point is when the bank has first started action but before the courts become involved. At this point any price agreed would have to at least cover the banks loan and be in agreement with bank to delay further action to allow sale to take place

The third point is at auction; once the court action has been started it is very difficult to halt and auction must take place. At auction, you could buy property for 75% of the auctionable value as recorded on Nota Simple. This will normally be 75% of original valuation.

The fourth point is after auction and before the bank has to take property over. At this point, a bank may be willing to part with property for below the actual mortgage amount outstanding rather than take over responsibility for property, pay transfer taxes and have to maintain property until a future sale. This point is ideal for cash buyers who will get best price possible.

The final point you can buy a distressed property is  when the bank has taken into onto their books. Some banks appoint their own agents and often these properties can be seen on banks websites. At this point the bank will be looking to cover loan plus any costs associated with taking property over so price almost certainly will have increased. It is however possible to negotiate and the bank may also provide a Spanish Mortgage at loan to values not normally achievable, to allow the property to be moved on quickly.

View Our latest Spanish Distressed Property List

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Tags: Distressed Property In Spain, Spanish Repossessed Property
Posted in Spanish Banks, Spanish Mortgages, Spanish Property | No Comments »

Low Rate Spanish Mortgages

Friday, November 13th, 2009

This week further to my comments on Low Rate Spanish Mortgages and Dominion Credit, I received a correspondence from a client who has had experience of dealing with them. It would appear my concerns about their Spanish Lending facilities have some validity and there remain many unanswered questions about these two companies.

The comments from Clive Ballard are posted below.

As you say, Dominion Credit and Finance website is new, The name was only registered Jan/Feb 2009. Low Rate Spanish Mortgages were advertising the Yen mortgages in Oct 2008. The DC&F website, like the LRSM website is not very professional for the nature of what it is supposed to sell, and the office in Singapore is not an office but only a phone answering service. Like yourself I could not find any references to Henry Braithwaite in the banking world. I phoned/e-mailed him on a number of occasions in March 2009 requesting information on agents, other than LRSM for these mortgages.
I got no responce to the messages left.
Since DC&F were not contactable, and had no website until Jan 2009, I wonder how LRSM were able to offer their mortgages in Oct 2008, and purchased the domain name in May 2008.

Low Rate Spanish Mortgages charge a non refundable, 500 € to apply for a Yen mortgage.
I applied for a mortgage from them in Jan 2009, when there office was in Valencier. Approximatly 6 weeks later when I chased the mortgage, they had apparently moved to Bilbao, though were working through a UK phone answering service. When they rang back, I was told the morgage was not granted, due to the financial situation, but if I liked to apply again in 3 months (and pay another 500€) the situation might have changed.
It seems to me that the only ones making money out of this, are “Low Rate Spanish Mortgages”, a 1/2 man run business who as well as running lotteries, also run a dating site under their other company name of Marverose S.L
They also have interests in an Estate Agents (wherepropertysells.com), though I think this may now, have closed.
N.B. The original UK company named Dominion Credit and Finance went bust in the 1990′ies.

I was also somewhat surprised when reading a web based article from the Guardian newspaper on GMAC fines in UK where the Guardian was doing plenty of back patting on how they raised the issue of GMAC unfairly treating clients in arrears to see a sponsored link at bottom of article from Low Rate Spanish Mortgages.

I have written to the Guardian asking how on one hand they can write an article criticising a bank for repossessing properties that are in arrears and at same time by default appear to  promote a company whose practices should cause concern.

I have as yet had no response. Perhaps dubious lending practices are only the Guardians concern if they are not earning any money out of it.

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Posted in Spanish Mortgages, Spanish Property | 1 Comment »

Need A Hacienda San Cayetano Development Mortgage?

Monday, October 19th, 2009

Clients completing on the Hacienda San Cayetano Development in Costa Calida, Murcia are now being contacted with completion dates.

The development was not funded by a bank so no developer’s mortgage is available which means clients requiring mortgages will need to shop around for their financial needs and arrange independent loans.

If necessary to allow this to happen clients may need to delay anticipated completion and negotiate with the developer for a little more time.

It is hoped the developer will be reasonable in allowing this extra given the complete change in mortgage availability in comparison to when most clients made a decision to buy.

For information on what lending facilities could be obtained and information on how to try to get an extension on completion date contact IMS now.

Tags: Hacienda San Cayetano, Raising Finance in Spain, Spanish Mortgages
Posted in Spanish Banks, Spanish Mortgages, Spanish Property | No Comments »

CAM Bank Spain Sends Out Threatening Letters To Clients In Mortgage Arrears

Friday, October 16th, 2009

A number of clients who currently hold CAM bank mortgages and are in arrears have recently received letters in the UK from a lawyer firm telling clients that should they fail to bring the mortgage up to date it is possible CAM Bank may pursue assets in the UK.

Whilst clearly the bank has the right to try in anyway they see fit to ensure the mortgage arrears are cleared these tactics; without also offering workable payments solutions for clients in difficulties; is harsh and possibly misleading.

Whilst it is true that ultimately should they be left with an outstanding debt CAM can technically look to the UK to recover money (so no client should ignore the possibility) the process and facts are less black and white.

Firstly, the process of repossessing the property would have to happen and then the property would have to be sold to crystallise the actual debt outstanding. This can take years.

Secondly, whilst it may be true that in its distressed state the property will not reach the amount outstanding; to pursue a UK residents assets to fill this shortfall would require UK court action.

Logic says that unless the bank is clear the client has sufficient net asset wealth in the UK; where another lender does not already have a first charge; and that the loan level outstanding is sufficiently high enough to make the cost and time of going through UK courts worthwhile even CAM bank will not add to their woes by pursuing further small outstanding amounts through a long legal process in the UK.

It would also be difficult although not impossible to see a UK court agreeing to their action when most clients have had little or no advice upfront into exactly what they were signing at outset and where the bank took no steps to ensure this was the case. CAM rarely or never offer workable solutions to clients to assist in keeping up payments like offering a term of interest only, a minimum payment for an agreed set time’ or a payment holiday as would be expected of UK lender which again would not work in their favour.

In the UK lenders are expected to have demonstrated they have done everything within their power to avoid getting to the point of court action and are heavily criticised if this is not the case.

CAM’s solution to their own problem; which has occurred because they of all banks in Spain took on risky non resident lending at high loan to purchase prices, undertook poor due diligence on documentation and left many lending decisions in the hands of branch managers who were only targeted on sales is to threaten rather than negotiate and worse than that threaten something that they know will cause severe stress and concern to their clients but in reality is unlikely action they will take.

Of all the enquiries, we get for re-mortgages 75% of them come from existing CAM bank mortgagees which sums up how poor across all elements of customer service CAM is.

My advice would be do not ignore the letter and take your own legal advice immediately if you are in arrears.

If you are not in arrears but fed up with CAM’s lack of service look to change to another lender where costs of move are covered; like the Halifax Switch and Save.

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Tags: Cam Bank Spain, Spanish Banks, Spanish Mortgages, Spanish Repossessions
Posted in Spanish Banks, Spanish Mortgages, Spanish Property | 5 Comments »

Spanish Banks Adding Compulsory Products To Mortgage Terms

Friday, October 16th, 2009

Increasingly all banks in Spain have been adding compulsory and for them profitable products to their mortgage offers.

It is in fact not legal in Spain for the banks to tie clients into products outside buildings insurance and a bank account unless the client gains a rate benefit for doing so. This seems to however be making no difference to the banks insisting on clients taking up; in particular life insurance; for the benefit of having a loan.

Where a bank links the rate or margin above Euribor to the taking of a specific product this will be written into the mortgage deed and should you cancel the linked product during lifetime of loan a new higher rate will automatically be applied. Whilst having the reduced rate may appear attractive, the cost of the linked product each month needs to be added to the monthly payments and often makes the overall terms more expensive than a higher rate without. If life insurance is required by the you this is of course not an extra cost and the lower rate may be of benefit but if life insurance is not necessary then this is just another sum of money on top of costs expected.

For banks that do not provide a specific rate linked to products; to gain an approval clients may however still find themselves being blackmailed into taking an insurance policy just to get an offer. Whilst it is not legal to insist a client takes the product a bank can of course reject an application without giving rationale so playing the game to get an approval is the pragmatic approach most clients will take.

Under this scenario however whilst the client may have to sign up for life insurance in year 1 the insurance requirement cannot be embedded in the mortgage deed and if the client cancels policy after year 1 there is absolutely nothing a bank can do to force client to take it in subsequent years.

Because of the cost of extracting yourself from Spanish mortgage terms at a later date; it is important to check if life insurance is being stated as compulsory for an offer of lending and whether this is going to be written into mortgage deed and linked to a rate or not. You can then assess what level of flexibility to dispense with the insurance cover at a later date you may have.

The poor behaviours of banks who are taking advantage of the overall difficulties in the worldwide lending market to force clients into taking other products immaterial of whether they are required or not is extremely frustrating. The law, which should assist to stop this happening, is toothless because it only relates to a completion and ability to place requirement in a mortgage deed; banks can do what they like when deciding whether to complete on a particular application. One lender in Spain “Bancaja” have a central risk department team that underwrite and approve an applications but the branch managers of the local branches who have the final say can, and often do, refuse to complete unless life insurance is added so if you want the loan you have to sign up or go without the mortgage even though you fit bank criteria.

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Tags: Banks In Spain, Spanish Banks, Spanish Mortgages, Spanish Property
Posted in Spanish Banks, Spanish Mortgages, Spanish Property | No Comments »

How to avoid the current poor exchange rates when buying in Spain.

Wednesday, October 14th, 2009

Whilst many bargains exist in Spain low exchange rates are negating some of these benefits.

Many cash buyers are torn between accessing property at low purchase prices versus the real cost given current Sterling to Euro rates.

Whilst setting up a Spanish euro mortgage to overcome this is one solution many buyers are put off by the costs of setting up a mortgage for what is expected to be a short to medium timescale. Spanish mortgage costs for those clients who know the requirement is only temporary can be prohibitive.

There is now a product available that allows cash buyers in Spain to maintain their funds on deposit in sterling and against the security of funds obtain a credit line in Euros that can be used to complete the purchase. Because a credit line rather than a Spanish mortgage is set up, costs like mortgage deed tax, and valuation fee are avoided.

The deposited funds can be placed in a range of guaranteed capital accounts dependant on clients preference. With the right selection of deposit or bond account, the interest rate difference between the rate charged on the credit line and the rate paid on the deposited funds can be as low as 2% which is in line or below current mortgage rates.

Cash held in sterling by the bank must exceed the credit line facility level to cover risk of further exchange fluctuations but with an insurance policy taken by client the bank can provide up to 90% of the sterling equivalent in Euros.

For clients who are not pure cash buyers and require up to a 50% mortgage the bank can satisfy both requirements. Provide up to 50% on a mortgage using property as security and provide a cash line against the deposit monies for the rest of the funds required for completion. This means even for buyers who are not complete cash buyers the ability to not change up sterling to Euros in current financial environment can be 100% avoided.

For further information, contact us now.

www.imsmortgages.com

heather@imsmortgages.com

+ 34 952 45 97 45

Tags: Banks In Spain, Buying In Spain, Exchange Rates, Spanish Mortgages, Spanish Property
Posted in Spanish Banks, Spanish Mortgages, Spanish Property | No Comments »

A Refreshing Change: An Ethical Spanish Property Developer

Thursday, October 8th, 2009

Whilst many buyers in Spain are currently price and discount focussed when looking for a distressed or discounted property other considerations should be taken into account.

If you buy a property that forms part of a large development with many vacant units you may get it at a very good price but what are the longer-term realities?

Firstly, all apartment blocks need maintenance and this maintenance is paid for by the owners. Do not expect a bank selling a distressed property who also owns all other uninhabited apartments in your block to stump anything  toward these maintenance costs it just will not happen. This means that the overall maintenance of your complex over time will deteriorate until all units are filled and a community of owners created.

If electric and services are being supplied still via the current owners who maybe the banks again if they stop paying their share it could adversely affect you.

There is still a lot to be said for serious buyers to consider buying in developments where the original builder is committed in the long term to the project rather than offloading as much of it and any of it as quickly as they can.

Never has this been more highlighted than when I recently visited Samara Resort Marbella,  a development of the Hines group. Hines amazingly enough and unheard of in my experience when it became clear the urban issues in Marbella meant no development could be sure their development would finally receive a first habitation licence immediately offered to refund staged payments already made by buyers. More than this unlike other developers they refused to market the properties at all until the first licence was obtained and legally correct and development was fully finished. This delayed sale of any property for 2 years.

This level of ethics is rarely seen in Spain. Hines fully completed their luxury development with no contribution of monies from buyers buying off plan. Hines now pays the community fees proportionally to the unsold units and will continue to do so until all units are sold ensuring anyone who buys now does not end up surrounded by something that looks more like Beirut than a luxury complex.

There are developments ,on the other hand where a communal heating and air conditioning system is in place has left those few owners who have moved in with neither of the above due to the developer starting to not supporting his share for unsold units.

Hines are not heavily discounting their units as are some but for buyers wanting a high quality property built by a company who has 100% committed to keeping to their ethical business beliefs and supporting their brand; despite the fact that clearly means it is currently costing them money and eating heavily into profits not yet made; they can be highly recommended.

A superb development operating with transparency and a genuine care of their clients

There would be no requirement for programmes like Paradise Lost if all businesses had taken the same approach and many of the issues Spain now has would never have happened.

My faith in human nature is restored.

www.samaramarbella.com

www.hines.com

Tags: Hines Group, Samara Marbella, Spanish Developers, Spanish Property
Posted in Spanish Property | No Comments »

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