A blog about our life in Sant Cugat between 2007 and 2015, strange discoveries, amusing local news, politics, economics and cute stories about kids.
Saturday, January 16, 2010
Watch out for underwater mortgages in Spain
From this article it appears that if you have the unfortunately luck to end up underwater in your mortgage (where the loan-to-value exceeds the permitted values), the bank can force you (after an independent appraisal) to either
Extend the mortgage to pledge other assets as collateral
Pay off enough of the mortgage to bring it into compliance
If you do neither of these things within two months, the debtor has “chosen” to immediately repay the entire mortgage.
Ouch. I'm not sure how often this would happen in practice though.