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Chased by a Spanish mortgage

admin — Mon, 20 Feb 2012 21:31:38 +0000

Banks never rest and even take action against foreigners who hand over their keys and leave the country

Few clients escape legal action by the bank when it comes to mortgage default. Not even property owners who hand over their keys to the bank and return to their home countries, victims of the financial situation in Spain and with no family or social resources here to fall back on. But the banks have all the time in the world and the law does not prevent them from following up a legal judgement in another country.

In no more than three years the number of mortgage foreclosures in Spain (the final legal step to repossess a property in the case of default) has almost multiplied by four, reaching 93,622 cases in 2010, according to statistics from the CGPJ (General Council for the Judiciary). “The majority involve foreign citizens” maintain sources, both from the association for those affected by property seizure and auction, AFES, and from certain financial institutions that have dealt significantly with foreign property buyers during the boom years.

“When the time comes for the foreclosure on the mortgage to be finalised, they go back to their home countries”, explain AFES sources who warn families in this situation that this is “not a solution in the long term”.

This is because when a court has authorised the foreclosure, the bank or savings bank “has the action in personam which is recognised regardless of the country you are in”, state judicial sources. This means that legally speaking the banks can chase their former clients wherever they are in the world.

The legal concept of “recognition and enforcement of foreign court orders” allows a sentence delivered in Spain to be recognised in different countries such as Ecuador or Romania, where many of Spain’s foreign residents come from. It is necessary to wait until the legal system in these countries recognises the Spanish sentence “depending on Spain’s agreement with each country”, continue the judicial sources.

In the case of citizens from EU countries, this process is easier and faster, say the sources, thanks to the EU regulation 44/2001 which states that judgements given in EU countries are to be recognised without special proceedings.

Sources from a savings bank admit that it is costly enough to chase up a debt in Spain, and so “the idea can end up being abandoned when there are thousands of kilometres involved”. However AFES warns that “banks have all the time in the world to enforce a sentence”.

The main problem Spanish banks face is that their debtors could live in countries, such as the United States, that recognise the concept of ‘deed in lieu of foreclosure’, where the debt is considered cleared when the property is handed over. In these cases the Spanish law ought to be applied, although on US territory the American legal system does not have to recognise a judgement that goes against US law in this type of case.

Spain’s Civil Code establishes that personal responsibility for a loan “affects all their assets, both present and future”, explains the lawyer Francisco López Soria, an expert in consumer affairs.

The best option is to try to avoid the foreclosure being finalised with a court order. Several months can pass from the moment a family stops meeting their monthly repayments until a final court order is passed. This period gives mortgage holders a margin to negotiate a solution with their bank.

The association AFES attempts to act as a mediator between customer and bank. “They can wipe out part of the debt with the sale of the property, introduce grace periods, or other solutions”, says the organisation. In that way “the bank gets rid of a property before having to go through costly foreclosure proceedings”, explain AFES sources.

When the property is sold, it is likely that the price will be lower than the mortgage holder paid when they bought the house. Some banks admit that they allow clients to refinance the difference in order to avoid the case going to court.

Meanwhile citizens with mortgage difficulties are hoping for a modification to Spanish law to allow the concept of ‘deed in lieu of foreclosure’ to be applied. While some “flexibility has been announced, the majority of experts believe it is improbable that Spain will adopt the same system as the United States. “There could be slight modifications”, says López Soria, but a change to the current system is unlikely.

Luxury tourism plans will attract visitors from Russia, Persian Gulf and the U.S.A.

admin — Mon, 20 Feb 2012 21:27:16 +0000

The Costa del Sol Elite Collection has been created to sell the most exclusive transport, hotels, leisure and excursions

The Costa del Sol is returning to its original roots, when it was a favourite tourist destination for high society and Royalty, and it is promoting its most luxurious attractions to markets with such great potential as Russia, the Persian Gulf countries and the U.S.A. The president of the Tourist Board, Elías Bendodo, recently presented details of the Costa del Sol Elite Collection, which is aimed at bringing together tour operators and travel clubs for those with high purchasing power, transport, accommodation, leisure and the most select excursions.

Marbella will be the standard bearer of this product which will include private aircraft companies, chauffeur-driven cars, luxury hotels and beach clubs and individually-designed trips to places of interest in Malaga province. This will be a new way of attracting magnates and high-ranking executives and will position the Costa del Sol as Spain’s third luxury tourism destination. “We will be the third corner of the triangle of the Spanish luxury sector, with Madrid and Barcelona”, explained Mr. Bendodo.

The Costa del Sol Elite Collection will be officially presented in March at the Arabian Travel Market tourism fair and then at events which feature the most exclusive tourist attractions, such as the fair in Las Vegas in August and the ILTM in the French resort of Cannes.

Planning

Mr. Bendodo says this new strategy will also include familiarisation trips for agents from Arabia, Kuwait, Qatar and India; the latter, together with China, are the main markets to which this exclusive product will be marketed in the medium term.

The Tourist Board is working with operators who specialise in luxury tourism, such as Latitud4 and La Vida es Bella, groups whose clients tend to be professionals between the ages of 30 and 40, who demand a personalised service when they go abroad and who are prepared to pay an average of 3,000 euros for their holidays although some will spend as much as 50,000. “It is an opportunity we cannot miss. Quality and safety are the two indispensable factors for these clients and the Costa has them both”, explains the president of the Tourist Board. The destination will also be part of Virtuoso, the luxury tourism network which is only available by invitation; it will cost about 40,000 euros for the Costa del Sol to benefit from the services of its 300 agencies, with six thousand agents in 22 different countries and about a thousand suppliers who specialise in these high level travellers. “Being part of this network is fundamental to having your own stamp as a luxury destination, and at the moment that only applies to Madrid, Barcelona and the Basque Country “, explained Elías Bendodo.

Challenges

The Tourist Board plans to create literature exclusively for this product and is contemplating ‘door to door’ activities via specialist agencies in different cities in Russia, the Persian Gulf and the U.S.A. Mr. Bendodo explained that the decision to redefine the luxury attractions of the Costa was not taken lightly but was in response to the recommendation of Spanish international tourism offices, who will now promote the new brand among worldwide travel agencies and international specialist media.

The president of the Tourist Board also said that Costa del Sol Elite Collection will cultivate a sector which has a great deal to offer and which has existed for some time, but it will reposition the area as a high quality destination, reinforcing its image and its prestige. It will also encourage tourism out of peak season. He explained that Russia, the Persian Gulf countries and the U.S.A. were chosen because they are markets in which the Costa del Sol brand is well known and linked to exclusive attractions. Also, last year there was a growth in visitors from these countries: 50 per cent more Russians, 40 per cent more from Arab countries and almost 14 per cent more Americans. The luxury sector is not affected by fluctuations in the economic situation and in Spain it ended last year with sales of more than 4,500 million euros and the number of overnight stays in five-star hotels rose by 20 per cent. The Costa has the greatest number of luxury hotels in Spain. “This shows the potential of this sector and that is why the Costa del Sol, as a leading destination, has to conquer its share of that market”, he said. Mr. Bendodo pointed out that luxury on the Costa del Sol began in Marbella, and thanks to visionaries such as Alfonso de Hohenlohe, it acquired worldwide fame. In the 1950s it was high society and European royalty who gave this sector the prestige which led to the Costa becoming what it is today. Other important factors were the presence of the Saudi Arabian royal family and the construction of Puerto Banús. After years of package holidays, the Costa is being polished up once again to shine on the map of the most exclusive tourism.

Foreign buyers throw a lifeline to the Costa del Sol’s real estate market

admin — Mon, 20 Feb 2012 21:22:22 +0000

It will take a long time for the real estate market in southern Spain to recover from the bursting of the bubble, although the good news is that there is light at the end of the tunnel. Developers and estate agents are now optimistically clinging to a lifeline that has come from abroad. The storm of the financial crisis has relented for the British, Germans, Scandinavians or Russians who are once again showing an interest in the Costa del Sol, and mainly Marbella, attracted by reductions (of up to 30 per cent in some cases) in the asking prices of properties.

The statistics confirm this trend noted by the industry. According to the latest property sales report published by the Ministry of Development, in the last three months of 2010, some 6,457 transactions were made in the province of Malaga, and of those 905 (14 per cent) involved buyers from outside Spain. This is not only one of the best results in Spain (behind only Alicante) but also reveals an increase of 31 per cent on the previous quarter.

A look at the annual figures clearly shows that it is the foreign buyers who are sustaining the growth in the province’s real estate market, where the 22,224 homes sold in 2009 increased, albeit slightly, to 22,442 in 2010. If we subtract the transactions involving foreign buyers from both years’ totals, the result would be negative (down 0.15%), from 19,103 properties sold in 2009 to 19,074 in 2010.

With these results on the table it comes as no surprise that the sector is pulling out all the stops to attract the foreign market, which is key to the industry’s recovery from the crisis. Ignacio Osle, sales director at Taylor Wimpey España, a British developer specialising in holiday homes, is confident that foreign buyers will be behind a “slow but sustained recovery”. “2011 has started well. In this first quarter enquiries made by foreigners at our office in Benahavís have gone up by 43 per cent, which shows that something is changing”, adds Osle.

Good prospects

The expert provides more statistics to support his optimism: “Three years ago we had 130 houses available for sale and today we only have one. This proves the potential these buyers have to absorb the stock of unsold properties”, continues Osle who stresses that the current demand from Scandinavian, Dutch, Belgian and Russian clients is centred on the Golden Mile area of Marbella.

Ángel Yagüe, coordinator of the Andalusian Institute for Financial Studies, believes that the key to this upturn in the foreign market lies in the reductions. Knocked-down asking prices, he explains, are “especially attractive to people from countries that are on their way out of the recession and believe that now is a good time to buy”. He goes on to say that at the moment foreign buyers are the only ones able to bring some relief to the struggling construction industry in this area. “Domestic demand has been significantly weakened by the high unemployment rate, the depressed economy and credit restrictions”.

José Prado, the president of the Association of Builders and Developers, is able to offer a profile of the foreign buyer. With an average age of 55, they have visited the Costa del Sol at least three times before and are retired or self-employed. Government statistics complete the picture, pointing out that the majority of buyers decide not to purchase brand new properties (731 of the 905 properties sold to foreigners last year had had previous owners), and they spend an average of 233,963 euros.

Prado agrees that foreign buyers, mainly from Germany and the UK, will play a significant role in the recovery of the property market. However he insists that more needs to be done to shake of the stigma of legal uncertainty, “which has generated a lack of trust”, referring to the threat of demolition hanging over illegal properties. “Fortunately there have been no demolitions and homes are being legalised, which is helping to improve the image of the province”, he adds.

Meanwhile Juan Antonio Pérez, director of the Real Estate department at the Institute of Business Practice, warns that while the fact that foreigners are still choosing the Costa del Sol is good news, the problem lies with credit. “Many come across a stumbling block when they ask the bank for a mortgage”, he points out.

Thirty per cent of foreign buyers chose a property in Marbella

The average foreign buyer attracted to Marbella is a professional person with medium- high or high standard of living from Germany or the UK. Property purchases made by this group of buyers in Marbella represent 30 per cent of the total of 905 sales to foreigners in the province in 2010.

José Prado, the president of the Association of Builders and Developers, stresses that the town’s new PGOU development plan, which has allowed for the legalisation of thousands of irregular properties, has helped demand to resurface.

Most of the properties purchased by foreign buyers in Marbella last year had had previous owners and were sold at an average price of 290,000 euros. Real estate agent Kristina Szekely, who specialises in luxury properties, points out that part of Marbella’s attraction lies in its special duality: “It has all a big city has to offer, but without the stress”. Szekely adds that while the market is picking up, the average seller’s margin for negotiation has stretched from between five and 12 per cent to as much as 30 per cent.

House price index

admin — Mon, 20 Feb 2012 20:52:48 +0000

The General IMIE index ended the year with a year-on-year decline of 8.1%, one tenth of a point higher than last November, with the index at 1719 points.

The General Index slowed its rate of decline in the year-on-year figures for January, falling by 6.6% to 1714 points compared with 1719 points the previous month.

The cumulative decline from the top of the market in December 2007 reached exactly 25%, meaning that houses have lost one quarter of their value since the beginning of the crisis.

In terms of the performance of the different market segments, “Capitals and Major Cities” recorded the most pronounced decline again during January with 8.7%, followed by the municipalities on the “Mediterranean Coast” with 8.1%.

Next were the “Metropolitan Areas”, with a decline of 6.5% compared to the same month the previous year.

With regard to the cumulative decline from the top of the market at the end of 2007, the “Mediterranean Coast” recorded an overall decline of 33.1% to January, meaning that it has now lost one third of its value since the start of the crisis.

Euribor drops – mortgage payments could begin to decrease.

admin — Mon, 20 Feb 2012 20:42:38 +0000

The Euribor, the main indicator to which mortgages are referenced in Spain, has dropped its daily rate by five thousandths, strengthening its downward trend and giving hope to those whose mortgages are coming up for review that their monthly mortgage payments could begin to decrease.

The daily indicator stood at 1.664% on Friday and is 0.338 percent down since 19th December, when it last saw an increase up to 2.002%.

El Mundo reported that with only a week and a half till the close of February, the Euribor is likely to stay at a monthly rate of 1.704%, which represents a drop of ten hundredths from the level marked by the indicator a year ago.

The expectation of better liquidity facilities from the European Central Bank (ECB) is gradually easing tensions in the European interbanking market and is encouraging financial institutions to lend money.

Holiday Villa Marbella Sleeps 15

Nikki Powles — Thu, 20 Oct 2011 12:23:59 +0000

Villa Splendido is a modern luxury villa with five large bedrooms and four bathrooms. It has two top terraces with outstanding views with seating areas offering privacy for our guests to enjoy some me time.
It also has a huge communal terrace where you can meet up with your fellow guests and family members with access from the main living room, master bedroom, kitchen and other terraces.
The pool area is fabulous with decking and sunbeds offering a wealth of relaxation and peace yet perfect for pool parties and eating alfresco!
The pool area and gardens are totally private and cannot be seen from outside of the villa.
It is a very quite area yet within easy distance of Marbella Town, Puerto Banus and many other local attractions.
You can walk to the beach and local shops in ten minutes or a taxi will arrive within minutes as the rank is very close by. There is plenty to do along the coast for children, Funny Beach is great for go karting and water sports and .La Cañada is very close by for shopping it is a
Modern mall with a good range of shops, from designer stores such as Adolfo Dominguez to high-street names like The Body Shop. There are many different Elviria restaurants offering everything from traditional Spanish food to modern global cuisine.

Large Reform project In Tolox

Nikki Powles — Wed, 19 Oct 2011 07:43:14 +0000

A great large house to completely reform in the picturesque village of Tolox. The house is laid over 3 stories with lovely views over the village from the 2nd and third floor windows. The lower floor has access on to the road and could be used as a garage. The roof needs replacing and could be utilised as a terrace with stunning views. The property has many possibilities and is well worth a viewing. The paperwork has been brought up to date by the current owner and is in place to begin the reform.

Delightful Finca in La Carreta Coin

Nikki Powles — Wed, 19 Oct 2011 07:13:33 +0000

A delightful bungalow; situated on a large plot with landscaped gardens and swimming pool. It has been built to a high specification, including cavity wall insulation and mosquito nets on all windows. The domestic water supply has a double filter and powerful pump. To ensure warmth throughout the whole house is a fan assisted log burning fire. Extra storage and accommodation outside! Nearest beach:25 minutes drive. Nearest bar/restaurants 5 minutes drive

Bullfighting banned in Catalunya from January 2012

Nikki Powles — Fri, 30 Sep 2011 14:25:00 +0000

CATALUNYA has officially banned bullfighting from January 1 next year, a decision that has been welcomed by animal rights enthusiasts and slammed by bull-breeders.

Only the right-wing PPC voted against wiping out these bloodthirsty events, saying there should have been a moratorium of three years and the decision reconsidered in January 2015.

The PPC has also opened a can of worms by calling for a review of the compensation to be awarded to those in the bullfighting industry as a result.

Party head, Rafael Luna, argued that in the middle of a recession with 700,000 people in Catalunya on the dole, entire hospital wards being shut down due to lack of funds and public money ploughed into basic social services being drastically cut back, the regional government could not allow itself the ‘luxury’ of paying compensation to those likely to lose their jobs as a result of the bull ban.

Luna says these people are not only breeders and matadores, but also ticket office workers, on-duty medical staff, farmers, and transport firms.

The total amount would be between 300 and 500 million euros.

Luna says this amount would be enough to pay the costs generated in a whole year for three major hospitals in the region.

The compensation was originally envisaged to cover 99 years of cession of bull-related activities, something that CiU leader Josep Rull calls ‘absurd’.

“This would involve compensating bullfighters who have not even been born yet, or are too young to know that they might have been bullfighters when they grew up,” he adds.

Rull also says that if the PPC is so concerned about the public cost of paying off those involved in the industry as a result of the ban, they should look at the multi-million figures involved in the government’s support of bullfighting.

Mosquitos home in on carbon dioxide we breathe out

Nikki Powles — Fri, 30 Sep 2011 14:19:09 +0000

Contrary to popular belief, mosquitos are attracted to their prey not by the sweetness of their blood, but by the amount of carbon dioxide they exhale.The average human produces about a kilo of CO2 a day, approximately 100 milligrams every time they exhale (about 13 times a minute).According to Juan Rueda of the Spanish Association of Entomology, an expert in biological mosquito control, mosquitos have a special “homing instinct” towards people who emit more CO2 than average.

The insects detect CO2 on the air current and know that there is fresh blood to be had not far away. Adults produce more CO2 than children, and the amount depends on diet and how physically active the person is.

The abundant rain that fell along the Mediterranean coast in the run-up to summer means that there are more mosquitos around than most years . Female mosquitos, who are the ones who sting, live for between 50 and 60 days and their life cycle begins again every time it rains.