The good news is that, with the economic downturn pushing up the number of foreign property owners struggling to pay the mortgage, Spanish lenders are finally starting to consider alternative solutions to a growing problem.

As is often the case when confronted with a problem, the best course of action is to be honest about the situation, and deal with the problem before it gets worse.

That is the advice that the banks are always preaching to clients. Now, however, it looks like the banks might be starting to take some of their own medicine.

They have seen the iceberg lying ahead. They are bracing themselves for the collision, and are dedicating resources to accommodate some of the passenger in order to reduce the causalities.

Recovery departments in most Spanish banks are feeling the pressure as their workload increases daily thanks to the economic downturn.

A glimmer of hope

In response some banks are developing business units within their recovery departments designed to help clients renegotiate conditions and accommodate them in some way. For banks, repossession is often the least desirable option.

Nevertheless, it is very important to mention several points at this stage.

Economic problems are not exclusive to foreign property owners, and the number of locals in default is rising fast too. That means banks are not just focusing on foreign buyers, with their special set of needs.

So, if you ran into language barriers and other problems as a foreigner when trying to take out a mortgage to finance your dream home in Spain, the chances are you will run into the same problems whilst trying to solve your mortgage nightmare. And lenders will still put you under as much pressure as possible to meet the repayments according to the conditions established in your mortgage deed.

But lenders might start to be more accommodating if you comply with two very simple conditions.

The first is that you can demonstrate that you really are at a point where meeting the next payment is impossible under current conditions.

The second is that, at that point, you are up to date with payments.

The fact is that banks will favour clients who are ready to deal with the problem, but will have limited sympathy for clients who try to bury their head in the sand and hope the problem goes away.

So, if you are struggling to pay the mortgage in Spain, you know what to do. Get in touch with your lender ASAP.