Spain´s 4th largest bank, Banco Sabadell is one of the only banks who are actively pursuing current or former mortgage clients in other European countries.
In recent years Banco Sabadell has absorbed a number of smaller banks.
Most notably Sabadell took over CAM, Lloyds TSB Spain, Natwest Spain and part of BMN network in Cataluña and Aragon.
All of these acquisitions added to Banco Sabadell´s already large portfolio of international clients with mortgages on second homes in Spain.
Gaining clients from Natwest, Lloyds TSB and CAM led to a large increase in UK based clients. Following the property market crash and general downturn in the global economy, many individuals found it difficult to meet the mortgage payments on their second home in Spain.
The value of many properties plummeted.
Banco Sabadell, like many banks in Spain, had been extremely reckless in their mortgage lending. The values placed upon properties were frequently generous to say the least.
Many mortgage holders decided to attempt to return the property to the bank. This process is known as dación en pago – whereby the bank accepts the property in full cancellation of the mortgage outstanding.
Many people spoke to their branch manager and gave the keys to the bank thinking that was the end of the matter.
However, the process is very different. As with the original purchase of the property, a mortgage settlement has to be signed in front of a notary.
The mortgage holder either needs to be present or appoint a solicitor to represent them.
It has now become apparent that many people were under the impression that their property in Spain had been returned to the bank and the mortgage cancelled when it has not.
Many other mortgage holders have simply stopped paying the mortgage in Spain. This eventually leads the bank to repossess and auction the property.
The law in Spain enables the bank to sell for 50% of the valuation.
In many cases this does not provided sufficient funds to clear the mortgage in its entirety. There could be a shortfall and under Spanish law the mortgage holder is still liable for this debt.
Now, Banco Sabadell is actively pursuing people in the UK for any shortfall outstanding.
I have received a letter from a UK solicitor. What shall I do?
If the property that you owned in Spain was auctioned by the bank and the outstanding balance on the mortgage was not covered you may receive a demand at your home address.
We are aware that UK solicitors acting on behalf of Banco Sabadell are sending out letters demanding payment.
If you receive such a letter, you should seek immediate legal advice.
It is likely that you have not heard any news relating to your property in Spain for quite some time. It is therefore important to verify exactly how the repossession and sale of your property was handled.
If you would like a no obligation consultation, please don´t hesitate to contact us today. We will discuss your
circumstances confidentially and advise on your best course of action.