The economic crisis building as a result of the coronavirus pandemic will leave some people with mortgages in Spain in financial distress, through no fault of their own.If this happens to you, it is advisable to seek help from independent experts on how to handle the situation.
Last week I attended my first webinar (online seminar, for those that don’t know), held by Terry Bell, speaking on behalf of Bell & Co. in the UK and Ireland, and EU Property Solutions in Spain and Cyprus. These companies specialise in helping people with business and personal debt find negotiated solutions to their financial problems.
Terry’s presentation about the typical financial problems borrowers from the UK and Ireland run into with mortgages in Spain and Cyprus was an eye-opener. For instance, there are still many people struggling with mortgages taken on in the boom years before 2008, and they are not getting any younger. Terry explained that the “demographic” of people with mortgage problems in Spain means that time is not on their side. They need to sort out this problem before it’s too late.
There are many people in arrears on the mortgage payments who think they can walk away from their foreign debts, and the problem won’t catch up with them back home. That is wishful thinking, even for those who did this years ago. Slowly slowly, Spanish mortgage debts are being worked though, and debtors pursued back home on the basis of EU directives, increasingly by vulture funds who have bought the debt.
The worst thing you can do if you find yourself unable to pay your mortgage in Spain is stick your head in the sand and hope the problem will go away. It won’t.
The best thing you can do is contact third-party experts like EU Property Solutions, who have dealt with many cases like yours, and know what to do to get the best solution for you. Experience is the key to negotiating the best terms in this complicated situation, which is probably something you have never had to deal with before. And every lender in Spain has a different approach to dealing with what they refer to as ‘delinquent debt’. Only experience of dealing with many cases helps you decide the right strategy.
Terry talked about all the problems facing borrowers in Spain and Cyprus, and how to deal with them, and it became clear there is one brutal problem in Cyprus that we can be grateful few borrowers in Spain are having to deal with, namely the Swiss Franc mortgages that were so gaily mis-sold to borrowers in Cyprus back in the boom years. Since then, the value of property in Cyprus has plummeted, whilst the Swiss Franc has appreciated, crushing borrowers financially in a vice of negative equity.
Mercifully, most borrowers in Spain have euro mortgages, but some of them will still be in negative equity more than a decade after they purchased, making it more difficult to pay off the loan. And now we have a new wave of financial problems to look forward to, thanks to the coronavirus crisis. If you find yourself in financial distress, and unable to cope with your mortgage in Spain, don’t stick your head in the sand, get in touch with EU Property Solutions.
You can watch a recording of the webinar below.