Mortgage lenders keen to avoid repossessions

Posted on February 23, 2009 by Mark
Filed Under Mortgages & Euribor | Leave a Comment

There was an article this weekend in the Spanish daily ‘El Mundo’ about the lengths Spanish mortgage lenders are going to avoid repossession. Repayment holidays, refinancing deals at 125% LTVs, and converting mortgages into rental contracts are just some of the solutions that banks are resorting to. The article also contained some mortgage market data that is well worth a look at, for understanding why the banks are so reluctant to lend more:

1 million households are having difficulty paying the mortgage, and 500,000 of them are already in arrears on their payments.
Home repossessions rose by 600% last year.
Banco Sabadell (parent of Solbank) has 30,000 clients that have missed at least one mortgage repayment.

“The worst of it hasn’t even started yet, not even in the Valencian Community and Catalonia, where there is a massive avalanche of repossessions, many of them against immigrants,” the article quotes one expert as saying.

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