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Thursday, 28 October 2010

Foreclosure in Spain Can Mean Lifetime Debt to Bank

In an article in the New York Times Suzanne Dayley reports that 'An estimated 1.4 million Spaniards are facing potential foreclosure proceedings, according to Spain’s consumer protection association, known as the Adicae. Recent figures from the courts show that the numbers are rising fast. In 2007, there were just 26,000 foreclosures. Last year, there were more than 93,000. Early indications suggest that they will be higher again in 2010'

she highlights the diffence in the way mortgage debt is treated in Spain compared to countries such as America and the United Kingdom.

For many Spanish mortgage holders, no longer able to pay their mortgages, the fine print in the deals they agreed to years ago is catching up with them. Not only are they personally liable for the full amount of the loan, but throw in penalty interest charges and tens of thousands of dollars in court fees, and people can end up facing an enormous amount of debt. Bankruptcy is not the answer because mortgage debt is specifically excluded in Spain.

There could be a very large shock for mortgage defaulters who think that they can hand the keys of the property to the bank and walk away.

Read the full article:
Foreclosure in Spain Can Mean Lifetime Debt to Bank -

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