Sadly, Fuerteventura, and indeed the whole of the world is in the middle of a credit crunch at the moment. So unfortunately, some homes are being repossessed. So what happens if you find yourself in this position in Fuerteventura?
Firstly – always go and speak to your bank first. The sooner they know of the situation… the more likely they are to be able to help – and may be able to enable you keeping your home.
1. Mortgage Arrears
If you fall behind on your mortgage repayments, your bank has the right to add “interés de demora”, which is extra interest on top of your mortgage loan. At this point, the bank will contact you and certainly try to come to an amicable arrangement
2. 90 days later
90 days from your first missed mortgage payment, your details will be handed over to the debt collection department of the bank. When this happens, the “Bank of Spain” is informed – and this can affect your bank’s own standing and share prices. So they obviously try to avoid getting to this point at all costs. You will find that the debt collection department in your bank will step it up a notch to try to come to an agreement with you.
If your bank’s debt collection department decide that getting the money from you is unlikely or going to be too much effort, then you will be officially informed by a Notary that your case is going to court. This generally a two to four weeks after that initial 90 day period.
4. The repossession order
A judge can then re-appraise your property value, and decide when your property can go to public auction
5. The Auction
This takes a bit longer – and in some cases up to a year… and if nobody buys your property at the auction, then the bank can take it for 50% of its value. If this is not enough to cover your outstanding debt, then you are still liable to repay the balance. You will also be liable for the court fees, and the transfer tax. This can add up to a lot of money as you can imagine.
This can take an additional six months – at which point the police arrive to remove you from the premises and change the locks. However, if you have children living in the house, this is certainly taken into consideration.
We strongly advise that you speak to your bank as soon as possible if you are having difficulties in meeting your monthly mortgage repayments. The earlier they know… the earlier they can help!