Thanks Ozmunky. My understanding was on the lines that you mention. Yes as interest rates goes up the instalment goes up. However when it comes to beefing up the Banks margin or the negating the shrinking LTV. I wonder whose valution the bank will use to establish if the values have fallen and if yes, to what extent. The demand of 15% -20% can be challanged.
In the present climate would the Bank forclose or accept an off balance sheet lower value on it Assets.
Yes, you are right.
However in the case of the UK, the Banks have hired lots of registered valuers on contract to go through their entre mortgage books.
The valuation they act on — and will demand a cash top up on — is accepted as such in a court of law so fighting it is difficult — if you have funds to fight it, its better to top up.
The excitement in Spain is about to start. Once everyone realises in Spain they (Banks, Govt) cant get money anymore from the markets, the Banks will turn nasty within to those who have highly geared mortgages on an asset that has decreased in value.
With Spain’s unreliable legal system the risk to owners is worse.