As the year progresses more of these type of offers will come to the table. Every bank in Spain is now considering how to most effectively reduce the level of unsold stock they hold and are developing bespoke and attractive mortgage terms to encourage buyers and to provide access to buyers who have limited deposits and would normally be precluded from buying in Span due to lack of capital.

All banks will still require that clients fit their designated criteria on incomes and are able to provide evidence of this but the banks will take a more flexible approach to risk assessment where the client is committed to buying one of the banks own properties and in many cases will provide up to 100% of purchase on a loan.

Under Your Spanish Mortgage brand IMS will provide a transparent and cost effective service which includes securing of the property and all mortgage related work and will continue to work with the banks to develop and find further interesting and lucrative mortgage deals attached to good value and fully legal new developments.

Using long established relationships IMS are working hard to ensure that these types of deals; readily available and accessible to residents of Spain; are also provided to non residents and will update their portfolio on a regular basis.

100% Spanish Mortgages Now Available! is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• 100% spanish mortgages
• 100 spanish mortgages
• 100% spanish mortgage
• 100 mortgages spain
• 100 percent mortgages spain
• spanish 100 mortgages
• 100 percent spanish mortgages
• 100% mortgage spain
• 100 mortgages in spain
• 100% mortgages in spain

Comments have come from government, analysts and the Chief Executive of Santander. All however are saying the same thing. The Caja’s must recognize and take action to bolster their liquidity and deal with their growing level of property ownership as their defaults on loans grow.

Caja’s equate to half of the financial service service providers in Spain and are unlisted businesses closest in terms of UK to building societies. Unlike building societies however which are owned by their members Caja’s are owned and run in general by political parties or regional political bodies.

Caja’s profits and policies are therefore used by the owners to enhance and finance their political agendas either at a local or national level. This means risk decisions and pricing are skewed toward political rather than business aims. Lending policy may be directed to certain groups or certain areas of funding completely at odds with what might be commercially viable but in line with gaining votes from sectors the local politicians either support or need in order to stay in power. When everything was booming no-one questioned this activity but in today’s environment the use of Caja’s to finance political agendas has become a serious problem.

Is It Time For The Spanish Caja’s To Change? is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• what is a spanish caja
• CAM Bank Spain safe or not to invest

The FSA in the UK who are looking at changes to be implemented this year after the credit crisis of 2008 and 2009 are looking like they will insist in future lenders in UK work on affordability ratios in the same way.

Fast track lending and self-certification will almost certainly disappear from the market and the documents required for a mortgage approval increase considerably for all applicants as has been the case in Spain.

UK residents will have to get used to providing a significantly increased levels of paperwork which will no doubt come as shock to everyone except perhaps those clients who have applied for mortgages in Spain recently who will already have experienced the high level of due diligence required and heavy document requirements that are insisted on.

Debt to income ratios often provide a higher level of funding for those clients with little or no other debts outside the mortgage but penalize heavily anyone with personal loans or credit card balances.

If the UK follows Spain banks will work off debt to income ratios of around 35%. This means that the amount of money going out each month on repayment of loans, cards and mortgages cannot exceed 35% of after tax not pre-tax incomes.

After years of easy money many clients who previously experienced no issues in obtaining further loans because of a high credit rating will find obtaining lending a much more difficult and painful process.

As brokers in Spain arranging Spanish Mortgages, we are very used to working with these restrictions but know from feedback from our clients that there is a real resistance on their behalf’s to supply so much information and a complete lack of understanding of why and how the banks work. Often clients who are rejected by Spanish banks cannot understand, as they have never had issues raising money in the UK. These very clients may in the future find UK lending difficult to achieve.

One of the key issues of the application process when working off debt to income ratios is everything has to match up so what appears on credit files must match with what is seen going out from bank statements. Because credit files and actual payments do not always match exactly the level of detail, a client then has to provide to confirm actual payments is high and precise and becomes extremely frustrating when dealing with an application as logic and judgment don’t apply just tick box verified facts.

It looks like the days of “The bank has the property as security so what’s the problem” are going to be well and truly over.

I many ways affordability ratios in fact make a lot of sense but there will almost certainly be a cultural backlash to the changes.

For once the UK will follow Spain rather than the other way round.

Mortgages in UK To Reflect Mortgages in Spain is a post from: Spanish Mortgages Experts International Mortgage Solutions

This offer provides a great alternative for any client in a position to take up GMAC’s offer. Having the capital reduced by 10% is a fantastic deal and at the same time given GMAC rates were high a lower rates could also be achieved making it a complete win, win situation.

The key issue for GMAC clients is that they probably went to GMAC because they could not evidence incomes; as no other lender allows self certified a move to another provider will only be possible if incomes; sufficient to meet the new banks criteria can now be proved. Re-mortgages are also only available at 60% of valuation and GMAC lent at the height of market at 65% loan to value.

Many self-employed clients may however have chosen GMAC as the simplest route rather than their only route and could in fact qualify for another lender; other clients circumstances may also have changed sufficiently for them to now be able to evidence the incomes they declared to GMAC allowing a move to happen.

Any clients wanting to check if they can be accommodated by another bank and take advantage of the current GAMC offer can contact us at IMS to check their overall situation and feasibility of a new lender taking over the loan.

GMAC Spain Look To Close Down All Their Operations is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• gmac spain
• gmac
• spanish mortgage reduction blog
• who owns gmac spain

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.

CAM Bank Spain Sends Out Threatening Letters To Clients In Mortgage Arrears is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• cam bank spain
• cam bank
• cambank
• cam bank repossessions
• cam bank es
• cam bank torrevieja
• CAM bank uk
• cam bank spain repossessions
• cambank es
• cambankes

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.

Spanish Banks Adding Compulsory Products To Mortgage Terms is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• abbey mortgage life insurance compulsory
• spain mortgages a life insurance
• mortgage life insurance spain
• mortgage life insurance compulsory
• life insurane on mortgages in spain
• life insurances on spanish mortgages
• life insurance policies with spanish mortgages
• life insurance cumpulsory for mortgages in spain
• is life insurance compulsory for spanish mortgages
• how to cancel life insurance in spain

If a bank in Spain has had to take back a unit on a large development due to non-payment of mortgage, they may consider allowing the unit to be marketed with the loan level that currently is secured against it. If the original loan was secured a couple of years ago against a higher valuation the loan level; if maintained; will currently equate to much higher percentages of purchase price now than the general market would allow for a new loan.

The units may hold developer loans where the Spanish bank committed to a loan for construction. In general, banks gave 60% of purchase price to developers to construct and it is this level 60% of previous purchase price that is secured. If the developer cannot pay the mortgage and the developer cannot sell unit at full price it is in everyone’s interest to reduce price of property but maintain mortgage level and provide access to the property to those clients who want a property in Spain but have small cash deposits or investors looking for maximum gearing.

The bank is already mortgaging the property at the level of funding being offered so this is not a new loan but an existing loan being what is called “ subrogated “ to a new mortgagee.

Subrogation apart from possibly providing much higher loan to current purchase prices also has the benefit of saving the applicant having to pay mortgage deed tax. The reason for this is that this tax was paid on this loan at its inception and is not payable again. With mortgage deed, tax at 1.8% of lending this is a significant saving.

Checking before taking an independent loan whether a more cost effective loan at higher loan to values is already secured against a property is something all buyers should make sure happens. In the UK, loans sit with individuals so you can take your mortgage from one property to another. In Spain, it is completely reversed the loan sits with the property so it is possible for a buyer to take over the loan that is already in place.

Whilst there may be some benefits of subrogating an existing Spanish Mortgage, you do have to take it over on the terms currently in place this means this solution is not always suitable and that the loan may in fact be very uncompetitive. An independent overview from an experienced broker on all options is still advisable.

Banks that have funded Polaris World include the following lenders

CAM Bank

Banco Popular

Banacaja

Banco de Valencia

Polaris World Offering 90% Spanish Mortgages For Non Residents is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• 90% spanish mortgages
• property spain 90% mortgages

Previously the level of funds a bank had to move to their balance sheet to cover bad debts was very high in comparison to the rules covering banks in other countries.

The very high level of liquid funds the banks had to send to their balance sheet made it difficult for banks to negotiate payment terms and assist clients in trouble as this was very costly for banks to provide. Allowing a client to sit 3 months arrears and then negotiate a payment plan to recoup arrears over a longer term and assist with immediate payment difficulties meant a bank had to move a very large part of the loan to its balance sheet and tie up liquid cash.

The impact of previous rules encouraged the banks to take back property and get the asset on its balance sheet rather than maintain a long-term mortgage with a client who had just short-term issues.

It is hoped that the banks will now use this relaxation of rules to be more pro-active in assisting clients with short-term problems rather than rushing straight to the courts.

We have long predicted the Bank of Spain would have to take measures and hopefully this is better late than never.

Bank Of Spain Relaxes Rules On Bad Debt Cover is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• debt consolidaton spain

Drastic changes to criteria have put Leeds and Holbeck products completely out of the market.

Ages have been reduced from maximum age 80 years to age 65 years.
All interest only facilities have been withdrawn.
Income multipliers have been slashed and further restrictions placed on what type of property they will lend on.

Of great concern to most brokers will be the lack of communication prior to change and the decision to not just change product but to do so as of yesterday when communication only came out late yesterday afternoon.

All brokers have been given until Friday if they have an approval in principle to get a fully packaged case to Leeds or approval is lost.  A challenge in itself; any cases where the society has not given an approval are affected immediately.

In their communication, they completely ignored the situation they may have put brokers and clients in. No apology for the necessity of the change and no regard or apology for the inconvenience (to say the least) they may have caused those business and clients who have supported them.

One can only assume from the action taken serious issues are afoot for Leeds and Holbeck as any mutual building society dedicated; as they claim to be to service; would not make these changes immediately without giving time for pending applications to be sorted unless things were dire.

It is either there are real problems here or their claim to quality service for all is in fact just lip service and their ability to communicate effectively with third parties non-existent.

“Just another example of banks disregard for clients and businesses or testing times ahead for one of the few UK mutuals left. Time will tell.”

Leeds and Holbeck Effective Withdrawl From Spanish Mortgage Market is a post from: Spanish Mortgages Experts International Mortgage Solutions

Incoming search terms:

• compare the market international mortgage

It is difficult when watching a programme like this not feel sorry for some of the individuals involved but for all those involved the issues need never have happened with correct advice. It would have been very helpful if the documentary had outlined on each case study what the actual steps should have been taken and what can be done by buyers wanting to buy in Spain to ensure they do not find themselves in the same situation.

The buyers who bought at La Zenia Elite made a number of errors or were badly advised by their legal advisers. Protection against exactly what happened to them is in place in Spain and is robust and legal. Failure to follow simple rules are what caused the outcome they have. If you are buying off plan in Spain by law the developer must have a bank guarantee. The bank guarantee, guarantees the deposits of the buyers should the developer fail to complete build or go bust. Each development should be able to produce a bank guarantee certificate which clearly stipulates; the terms of the bank guarantee; when it can be invoked and under what circumstances. It will also outline what interest rate compensation would be payable on funds tied up as deposits. If this certificate is not available, visible and terms not understood then deposits should not be passed. If the certificate is in place, is understandable and it’s terms are acceptable then deposits can be safely passed as a bank is underwriting the cash.

Secondly, a development is only complete when the whole development or that phase has what is called a habitation licence. This licence is another legal obligation and is confirmation that all works as per the licences originally granted have been finished and that the property meets the legal standards required. Without this licence it will not be possible to get direct mains water, electricity etc connected to individual properties so anybody moving in before it has been issued will rely on developers utilities. The habitation licence may take some weeks to be granted and people do get talked into completing before the certificate is issued by Town Hall. Passing over full funds and completing at Notary before it is issued is one of the most common mistakes made and under no circumstances should a buyer do so.

Legally they cannot be forced to complete whatever pressure they are put under by the developer or seller without this document. Legally the document confirms all works are completed to the standard required. Without this licence at any time the property could be deemed as built illegally, not meeting the original plans that permissions were granted under and getting utilities connected may be impossible. With it you are safe.

The same applies to re-sales if it does not have an actual certificate available even on older properties take great care and ensure property is not only registered locally but forms part of the Junta’s and national current 5 year urbanised plan known as the PGOU. All buyers should read the small print on any marketing material as all developments only require the developer to finish and complete the buildings for living no contract ever requires the developer to complete any additional infrastructure including club houses, golf courses, health clubs gardens etc.

All buyers should take this account when deciding to buy as if not having the golf course would mean you would not buy don’t buy because there is no guarantee or obligation for it to be provided by law. If the golf course is a specific requirement and what makes the property appealing buy a property where the golf course is completed not in the planning stages.

It would be very helpful both for buyers and the total market if along with the headline horror stories these type of documentaries helped educate people how to take all precautionary steps they can and how to understand the actual remaining risks they may be taking. Most things in life are a risk but taking an informed risk is a completely different ball game to taking an uninformed risk.

It is not true and has never been true that banks accepted mortgage applications if you “ had a pulse and a passport”. When I started arranging mortgages in Spain some years ago it was true that the banks did less checks than now but the real issue has been the exodus of brokers from the UK seeing Spain as a good place to earn a quick buck without regulation who convinced clients to falsify papers, take loans they could not afford or use dodgy valuations to get in mortgage funds for more than the property was worth. These activities have sent the finance market in Spain for genuine buyers into turmoil making any application now very difficult to obtain. This is due to a high delinquency rate of mortgages with clients who have no embedded interest in the property in terms of their own cash and properties worth less than the mortgage amount. The banks in Spain are now so pedantic on applications that arranging a mortgage has become an unnecessarily onerous task even for quality clients.

Taking a mortgage in Spain is different to UK the whole process from application through to securitisation does not reflect the UK. Again many clients have fallen foul because they have either made big assumptions of how it will work or have been badly advised or have gone to banks direct who do not explain clearly or in English exactly how the mortgage will work in the longer term. In fact again the Spanish Mortgage market is clear, understandable and its idiosyncrasies known to any broker who is experienced and takes the time to protect the client fully. This means just like the UK the broker should take into account the legal issues surrounding buying a property, land classifications and be able to explain to the client fully the implications of any actions they are planning to take.

ITV 1's Paradise Lost – Good Mortgage Advice Would Have Helped is a post from: Spanish Mortgages Experts International Mortgage Solutions