Thursday, February 19, 2009

The latest Spanish bank con!

Various news stories emitting about Spanish banks setting up real estate divisions to take on board their repossessed properties.

Here is the deal, they offer to buy the property off of the client for the amount of the outstanding mortgage.

So even though the client may be only a few payments in arrears, and in most cases has put in 30% at least, plus costs, they are only going to take the house for the value of the mortgage.

Then, they can hold the property for a few years, and sell at a profit, as they have bought them at large discounts!

Plus, for the Spanish regulators and their shareholders, they can call a 350k property an "asset" on their books, not a 350k unpaid debt !!!!!!

As I have mentioned before they are not willing to admit to the problems, even though it is clear how much shit they are really in. They are just playing with numbers to hide the issues under the carpet.

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Tuesday, February 10, 2009

Mortgage in Murcia - no can do.....

Getting a mortgage in Polaris World has been problemmatic for a while. Leeds Building Society won't touch the place, along with a number of other banks. Valuations have been poor for a while, and the sentiment is that there are an oversupply of properties, that were built cheaply, and many of them to clients that won't be able to complete on the purchase or service the mortgage.

Today though, I approach one of my Spanish lenders with details of a new (good quality) client, that is purchasing at Polaris World, to be told that they won't lend in Murcia !

Not just Polaris, but the whole flipping region!

This just seems to be getting worse, and the banks are supposed to be lending normally !!!!!!

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Thursday, February 5, 2009

Long term parking in Dubai

I read an article in the Times today, about around 3000 cars that have been abandoned at the International airport in Dubai, as people flee the financial problems there. You leave your flashy apartment, chuck the keys at your bank manager, drive to the airport and leave the BMW (on finance) at the airport, and bugger off back to the UK or wherever it is that you are from.

The property boom in Dubai (compared to Spain and elsewhere) has happened over a shorter period and with more pronounced growth rates. It seems that because of this they are coming crashing down to the ground so much quicker too.

Spain has decades of holiday destination experience and holiday home ownership behind it. Plus a mortgage and banking system that, whilst pretty archaic, is developed enough to at least be in a position to lend.

The mortgage market in Dubai has barely got off the ground, before the shit has hit the fan. All those with buy to lets and offplan apartments that had been hoping for 70-80% of inflated valuations are going to be in trouble. They will be lucky to get 50-60% of purchase price at the moment. Consequently many will just walk away and lose their deposits, hence putting more empty, repossessd units back into a falling marketplace.

I have been trying to help some clients to mortgage their place in Dubai, and it's just not possible. Plus, most lenders would only lend on certain developments and for certain builders. It's highly likely that this wasn't mentioned by estate agents at the time of purchase.......