Re: Re: Spain: the new crisis in Euroland

#99308
Chris M
Participant

@charlie wrote:

….. I know this topic has been discussed here before but are the banks in Spain still holding on to these properties or are they beginning to let them go as things get tighter?

Therein lies the huge problem and difference.

I think Fuengi might back me up here.

The properties that the banks have, that they have respossessed, that they do have for sale, do not simply have €150k outstanding mortgages and can sell PDQ for €175k thereby getting the problem off the banks books.

Oh no, the bank has the property, bought for €300k by the defaulter, with a mortgage of that amount (100%) because the broker and the developer connived to say the sale price was €360k and the bank now has the keys and a €300k mortgage outstanding, but a sale value of €220k.

So, I don’t know about Fuengi, but we hear of the odd bank property here and there, have been offered keys to a few and have actually turned them all down, because there are better deals from private vendors than banks.

How could the banks have let this happen? Well we have had all those responses, but I believe until years go by, the property value is allowed to be written down and down, inflation comes into play, prices eventually rise, and or some other deal is done to write off the losses, then those properties will sit and fester.

Because I would say in 10’s of thousands of cases, banks have properties that would only sell for €100,000 less than the mortgage outstanding.