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British couple default, Spanish bank goes after UK home

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British couple default, Spanish bank goes after UK home

Postby mark » Sun Nov 28, 2010 11:00 am

This is the first concrete example I have come across of a Spanish bank going after the UK home of clients in default.

Image
Devastated: Carol and Ian Chatterton outside the Wiltshire home they could lose

A couple who face losing their house in Britain to a Spanish bank have warned of the dangers of falling behind in mortgage payments on holiday homes abroad.

In an alarming development for the many thousands of Britons who have bought properties in Spain, a bank in Marbella is using EU law to force Carol and Ian Chatterton out of their £300,000 cottage in Wiltshire.

The couple – who are both NHS paramedics and have two daughters aged 12 and 14 – could be forced to sell up to pay back a mortgage on an apartment in Spain, following a hearing due to take place on Tuesday.

Read more: http://www.dailymail.co.uk/news/article ... z16ZO7maSK
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Re: British couple default, Spanish bank goes after UK home

Postby shakeel » Sun Nov 28, 2010 12:05 pm

Without going into the rights & wrong of paying back borrowed money. Banco Sabadell has branches in UK. The head office being in Trafalgar Square, due to this Banco Sabadell has the man power, logistics & mechanism to enforce their debts.

Besides, Banco Sabadell is a Catalan bank. The Catalans are known for their tightness. Sorry Mark.
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Re: British couple default, Spanish bank goes after UK home

Postby lenox » Sun Nov 28, 2010 4:19 pm

Banco Sabadell used to belong to Nat West, didn't it?
I was roped in yesterday to see some apartments being financed by IberCaja. Fancy gardens and hot spas etc, the apartments with a low payment for the first few years, and then higher later on. The whole operation to last 40 years (you could say '480 letras' in oldspeak). Plus savage community charges. How many of the buyers will still solemnly be paying twenty years from now? Will the heated pool and buganvillas survive?
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Re: British couple default, Spanish bank goes after UK home

Postby UBEDA » Sun Nov 28, 2010 8:06 pm

you can't borrow money and hand the keys back when the going gets tough !!!!!!!!!! what did they think?? tails and tails!!
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Re: British couple default, Spanish bank goes after UK home

Postby flosmichael » Mon Nov 29, 2010 1:14 pm

So let's see:

- they stay in a £300,000 cottage in Wiltshire. Now, the real value is at least 10-12% less i.e. the most £265,000

- the selling/advertising fees would be about £5000 so they would get about £255000.

- Halifax holds the mortgage on the cottage, which stands at £250,000.

So they have about £255000 - £250,000 = a total of about £5000 equity in the house.

Is it worth putting their name in Daily Mail for £5000?
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Re: British couple default, Spanish bank goes after UK home

Postby p800aul » Tue Nov 30, 2010 10:25 am

Maybe I'm just thick but there seems more to this story than the Daily Mail is letting on (it must be trure I read it in .....)

"The bank is using a European Enforcement Order (EEO) to take control of the Chattertons’ three-bedroom home near Chippenham, where they have lived for 20 years."

"The Halifax holds the mortgage on the cottage, which stands at £250,000"

Now the mortgage is either interest only or they have borrowed against the house before. If it's interest only and they haven’t taken a second mortgage, then 20 years ago they paid over the odds for a property now worth only £250,000.
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Re: British couple default, Spanish bank goes after UK home

Postby flosmichael » Tue Nov 30, 2010 11:43 am

p800aul wrote:Maybe I'm just thick but there seems more to this story than the Daily Mail is letting on (it must be trure I read it in .....)

"The bank is using a European Enforcement Order (EEO) to take control of the Chattertons’ three-bedroom home near Chippenham, where they have lived for 20 years."

"The Halifax holds the mortgage on the cottage, which stands at £250,000"

Now the mortgage is either interest only or they have borrowed against the house before. If it's interest only and they haven’t taken a second mortgage, then 20 years ago they paid over the odds for a property now worth only £250,000.


They MEW-ed the UK house, took £150000 and put the deposit for the Spanish apartment, thinking of making a killing. Now they stand to lose both.

Conclusion: Never do that.
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Re: British couple default, Spanish bank goes after UK home

Postby El anciano » Tue Nov 30, 2010 1:55 pm

Seems like a bit of a non-story to me, 20 years in the home and an outstanding loan of that size, plus the Spanish place just tells me that they are at best imprudent

Imprudent people getting into financial difficulties is not a news story IMHO, and I have no sympathy for them or their situation
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Re: British couple default, Spanish bank goes after UK home

Postby mark » Thu Dec 02, 2010 6:28 pm

Follow-up story on this at The Olive Press made me smile. It ends:

"When the Olive Press contacted Banco Sabadell it insisted it was the first it had heard of the case.

A press officer said: “Send me an email and I will look into it.”"

Read full article at The Olive Press
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Re: British couple default, Spanish bank goes after UK home

Postby logan » Mon Feb 14, 2011 12:40 pm

As EU convergence in all matters moves ever closer the public need to be aware that debts are enforceable everywhere. A debt in Spain will be like having one in their own country of origin. Legal judgements and treaties are there to be enforced.
Personally, I agree with El Anciano, I think this is a none story. Why should banks not try and recover their losses from the assets of the debtor wherever they happen to be. That's normal is it not?
The only question for the bank are the costs involved and that will become easier with time as legal procedures improve.
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Re: British couple default, Spanish bank goes after UK home

Postby katy » Mon Feb 14, 2011 1:25 pm

There are still two big obstacles to this

The bank has to sell the property first before they chase the owners.

Many of the terms and conditions plus the massive default charges would be considered as "unfair" in a British Law court.

I think it is just scaremongering.
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Re: British couple default, Spanish bank goes after UK home

Postby logan » Mon Feb 14, 2011 3:13 pm

The bank has done this with an EEO. (European Enforcement Order). This has to an uncontested debt to be legal and effective. The way the bank get round this rule is to insert a clause into the original mortgage agreement in the small print giving up their right to contest any debt proceedings. The couple will have signed this.
The banks do not need to sell the property before proceedings under this law can be effective. The defaulted debt arrears are sufficient.
The treaty which created EEO's is the 1968 Brussels Convention on enforcing judgments and the 1989 Lugano Convention.
Britain is signed up to it and has to follow it's conventions. No British court can consider the enforcement conditions as unfair.
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