The instruction of two independent valuers to value the assets held, can only be a positive that will ensure Spanish banks are transparently owning up to the size of the problem they have, and will encourage them to more realistically price their stock.

The insistence that they clear at least 5% of their stock held will also help in pushing prices to rock bottom which is always where you have to start a recovery. Where there appears to be no concentration is on the repossession process itself which is long winded, costly and rife with activities bordering on fraud as the whole process is run by a tight knit community of people in the know with complete lack of transparency. The process helps neither the borrower nor the Bank but does help line the pockets of the auctioneers, Bank Staff and those with court links.

Even after what ultimately will almost be a closed auction, where the best was creamed off before getting to court, the Bank does not immediately get possession. Having waited possibly up to three years to get to court the Bank may then wait many months for the court to pass ownership to them.

Often the Banks themselves are left in the dark about the points in the process and have little to no rights to manage the court action effectively. Prior to this the bank has no access to the property, cannot check the situation of repair of the property and worse still incurs taxes and costs even before they can in fact market it.

Spanish Bank owned property two independent valuers to value the assets held is a post from: Spanish Mortgages Experts International Mortgage Solutions

This can be in circumstances where satisfactory income evidence cannot be provided that meets the Banks stringent requirements; equity needs to be released for purposes not allowed by Spanish Banks or for commercial activity.

We have access to private funds for loans between € 25k to € 2m for any purpose

Interest rates 7.5%

Up to 10 years on interest only basis or repayment

For further information contact us today.

Private Lending Commercial and residential is a post from: Spanish Mortgages Experts International Mortgage Solutions

Despite taking advantage of the European Central Banks cheap bonds issued over the last few months the Banks in Spain have chosen to buy sovereign debt with these funds rather than to lend to the residential and commercial sectors.

Data shows that mortgage lending in Feb 2012 was down 9.4% from the previous month and a whopping 47.1% down from the same month the previous year.
Interest rates were up year on year by 17.3% at an average granted rate of 4.54%.

These figures include lending to the resident and nonresident market and also lending given by Banks where their own stock is being bought. This suggest lending for independent properties is down even further and average rates being offered for the purchase of an independent property are even higher.

All Banks plan to contract their lending books this year in an effort to meet new balance sheet and provisioning requirements.

At IMS our completions over the same periods for non residents show that completions for us are up 28% year on year with January and Februarys 2012 figures being very similar with a slight increase in February over January rather than the national average of a 9.4% decline.

Average granted rates were 4%.

Whilst the Banks remain cautious this is evidence that with the right research, experience and presentation of packaged applications the trend can still be bucked.

Spanish Mortgage Lending news 2012 is a post from: Spanish Mortgages Experts International Mortgage Solutions

The view of the Bank of Spain is that the IRS will provide a more stable index than the more volatile Euribor.

It is now being considered whether to abolish the Euribor for mortgage purposes and move to one index for all new loans. It is expected a decision will be made by the end of the year.

Spanish rate index. is a post from: Spanish Mortgages Experts International Mortgage Solutions

Is it still necessary?

Probably not. Whilst there are still good properties around that have more than one buyer interested, given the amount of property for sale the chances of another buyer coming along and buying before all the necessary legal checks etc are done and a contract can be signed are remote.
The reservation is normally not refundable and even where instances of clauses are included, like subject to mortgage approval, papers all in place etc the piece of paper itself is worthless in a court of law in Spain. This means you have little to no protection if the seller or agent refuses to pay back the reservation monies.

Where the reservation fee is taken as refundable this is normally refundable for a very short period and a period of time that is unlikely to allow for full legal checks to be done and or a mortgage approval to be arranged and valuation where required undertaken. This means in reality if you pass over a reservation it is most likely it will not be refundable if you need to back out.

Most good agents would not of course keep your money and there are plenty of examples of people getting back reservation fees because for whatever reason they have decide to back out but why take the risk.

The only benefit is the reservation fee technically removes the property from the market. The reality however is very different. It is most likely more than one agent is marketing the property and should another buyer be found before you can get to purchase contract the seller has no obligation not to take another offer. Whilst if you pull out you risk losing your reservation fee there are no penalties for the buyer pulling out, they just have to return your money to you.

The best advice, unless you genuinely believe you will lose the property of your dreams is, never to put down a reservation fee. Make a formal offer in writing via the agent subject to contracts. If your offer is accepted appoint an independent lawyer and ensure that all necessary checks and searches are done as quickly as possible and sort your finances so you can safely move to purchase contract at which point the property is secured.

Occasionally a seller will not accept an offer without some indication of financial commitment, if this is the case make sure any reservation fee is passed by your lawyer and that the monies are instructed to be held in yours or the sellers lawyer account not the seller or the agent direct.
If you appoint a lawyer before you visit Spain to act on your behalf, and arrange a mortgage approval in principle before coming to look at property you will be able to move at the optimum speed that will help you secure the property but in no way risk any of your hard earned cash.

Should I pay over a reservation fee or deposit in Spain. is a post from: Spanish Mortgages Experts International Mortgage Solutions

Today the market is much more transparent and professional but as sales start to grow some poor practices are beginning to raise their ugly head.

Finally the Embassy in Madrid is seeing fit to point out to UK buyers the pitfalls and warn buyers that most historic issues on purchases have been driven by poor advice.

Quality and independent legal advice is possible to get in Spain but one should avoid the eternal triangle of legal adviser, estate agent or seller, and buyer and ensure a legal representative is sourced independently and not by recommendation of a third and involved party.

Warning From The British Embassy Regarding Spanish Property Purchases is a post from: Spanish Mortgages Experts International Mortgage Solutions

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The product can be in Euros or sterling dependant on client’s preference and is either linked to the 3 month Euribor or Bank of England Base rate.

The loan is signed and secured in Spain but offered under UK law. The product has competitive rates, second highest loan to value available in Spain after Sol Banks 70% offering, zero early repayment penalties and no compulsory products required outside buildings insurance.

Proven rental income from buy to lets is assessed as personal income and the product has a dual underwrite against affordability ratios and income multipliers.

Minimum loan size is Euros 100k or GBP 83k.

BBVA also has a 50% equity release product for general purpose. With few other banks offering this facility and none allowing funds to be taken back to UK this provides an opportunity for clients looking to raise money against a Spanish property to take funds out of Spain.

New Spanish Mortgage Product From BBVA is a post from: Spanish Mortgages Experts International Mortgage Solutions

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While other lenders have withdrawn from the European market with many French Banks closing the doors to international clients, Spanish Banks doing the same and many international lenders like Lloyds and UCB either withdrawing totally or partially Ubiquitous Mortgages owned by Mark Foreman are out there with rates that appear unbeatable, are the same wherever you buy immaterial of underlying interest rates in that country, and rates that cannot be replicated by the major financial institutions.

Why Ubiquitous, who say they are the lender, would take a completely different view of the markets to other lenders and be able to finance the capital required to lend at rates well below the current cost of funds is not clear.

According to their website, which has been updated recently, they have the enormous sum of GBP 250k paid up share capital. This massive amount of capital obviously allows them to borrow on the open market at rates well below those of the largest Banks in world like Barclays whose Chief Exec earns more than that in a quarter.

Unless they have a banking license in all the countries they lend in it must be private lending and not covered by any banking regulation within the countries they operate in. Either way they are apparently able to sit outside the current liquidity requirements for all lenders, as having GBP £250k liquid cash would hardly allow you to lend anything if you were to fall within current balance sheet requirements stipulated by most central banks and regulators. Of course the balance sheet may have much more cash to cover risk but then if so why not mention it.

To insinuate on their web page a mortgage broker is unstable because they usually only have GBP 100 paid up share capital will not give comfort to any client who knows only too well there is a huge difference between being a service provider which a broker is and an apparent worldwide lender.

To even raise paid up share capital as an argument to use Ubiquitous seems ludicrous because of more concern to a client could be the fact they have admitted to such a small amount of paid up share capital.

The conclusion clients may come to is that they may not be the direct lender at all and are at best in fact an agent for another financial institution, who either has private investors who only want to earn just over 3% a year, or have a tranche of money from a lender who can buy funds very cheaply or have such a high level of liquid cash they can lend at rates that for other banks is unprofitable. If this is the case why say you are the lender as this is misleading.

Either way a sensible client would certainly want to see the type of legal document they would be asked to sign. Want to understand how this is covered legally in the country of purchase or equity release, how the money for monthly payments will be collected, and what could happen to interest rates in the future even if it appears to be a fixed rate for life so they can get their lawyer to check its validity before parting with any money. To request this is not unreasonable and the information should be readily available.

It would also appear that lending criteria is not always clear as interestingly in last couple of weeks one client has been told by Ubiquitous that they have a minimum loan size of € 150k (when the client only required 60k on a 300k purchase), whereas another client who was buying at 150k and needed 70% was not told there was any minimum.

A valuation fee for an automated valuation is required and often this valuation, according to various comments from previous clients on web, apparently comes in too low to allow lending.

It is a little strange that the client who only wanted 60k was told minimum loan of 150k requiring then a minimum valuation level of € 215k rather than minimum € 85k valuation that would be needed if he had the loan size he wanted. The more cynical client might say the minimum loan level quoted was to allow a get out on valuation as it could be difficult to substantiate not achieving 85k valuation on a purchase of € 300k even in today’s difficult times.

Automated valuations which apparently Ubiquitous can do in a variety of countries, even those where house price data per region is scant require no visit to the property and no way of substantiating it has actually been done. The fee however is as high as for a full formal visit form an authorized valuation company.

Valuation fees are quoted at GBP £239 and despite saying on website there are no application fees a registration fee of GBP £95 is also payable. This is GBP £334 for every client who has been told they are approved and is willing to hand the money over, with no guarantee of lending finally being given, and with little cost incurred by Ubiquitous who deal online email only. Perhaps it is little wonder they have GBP £250k paid up share capital.

Ubiquitous Mortgages is a post from: Spanish Mortgages Experts International Mortgage Solutions

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The downgrading of a number of Spanish Banks, Spain itself and the previous weeks downgrading of a number of UK Banks who lend in Spain has seen a very quick increase in margins across the board.

Even Banks like Barclays who missed the downgrades this time round have increased their variable non resident rate from 1.95% to 2.35%.

By far the biggest impact on the Spanish market of the downgrades as it relates to foreign buyers is Lloyds moving minimum margins from 1.5% to 3%. As the last interest only lender to gain 5 years interest only with Lloyds now costs a massive 3.80% above Euribor.

Changes are immediate with only full applications received in full by 21st October having the old rates held.

Against this backdrop the good news seems to be that for their own stock Spanish Banks are absorbing increases in costs.

Banco Popular will offer 0.25% above Euribor for first year followed by 0.50% and Sol Bank are offering 0.60%. With funding up to 100% available at such keen rates Bank owned property is looking good to offer on. Yearly interest costs from the normal 4% Sol Bank rate to their bank owned rate means for every 100k you borrow you save € 1.344 per year in interest payments.

Spanish Markets In Turmoil! is a post from: Spanish Mortgages Experts International Mortgage Solutions

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The increase for loans at 60% or below is only 0.15% with rates including life cover of 1.40% being offered the higher rate now only applies to loans between 60% to 70%.

Whilst maintaining their ability to take on 70% loans this is a clear indication that they intend to manage the portfolio of 70% loans by pricing techniques making the 70% less attractive.

This happened in the same week as one of the banks who are made up of two Cajas and intend to float launched a standard 70% product with pricing from 1.50%. The merged Caixa Nova and Caja Galicia have confirmed a new joint policy of up to 70% for non residents. All applications are agreed on a case by case basis and pricing will reflect the overall profile of the application at 70% with staring margins of 1.50% they will help fill the hole Sol Bank appear to have vacated.

Sol Bank increases rates and a new Spanish Bank adds 70% loans to their portfolio. is a post from: Spanish Mortgages Experts International Mortgage Solutions

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