Tropins Blog

If you are like many people today, you may be having trouble making ends meet or are living paycheck to paycheck. This often leads to homeowners defaulting on their mortgage, and defaulting on a mortgage for a primary or secondary residence can have serious repercussions for the homeowner. These consequences vary by country and can even vary by state or province within the same country, so it is important to understand them fully.

For instance, when you default on Spanish mortgages, there are certain consequences. If you are not a Spanish citizen but own a home in Spain, you may think its still possible to easily walk away from the mortgage with no consequences whatsoever. People who were not Spanish citizens but owned a vacation or second home in Spain could default on the mortgage with little or no cost or repercussions. But now Spanish banks have become more aggressive about enforcing mortgage terms for all homeowners, even non-Spanish citizens.

One option you have when you default on your Spanish mortgage is to turn over the home to the bank. This simple option will save the homeowner a lot of money in court costs and additional interest on the home loan. But although this is an option, it must first be discussed with the bank. The bank is under no obligation to let you out of the mortgage by taking the home back. Homeowners that have a true hardship as a reason for defaulting on a Spanish mortgage will likely be more successful in negotiating a home turnover. An example of such a hardship would be the death of a spouse or another situation that has caused your income to be drastically cut.

If despite your attempts to negotiate a home turnover, the bank refuses your offer, you must then sell your home. Try to get a final sale price that will cover the remaining amount on your Spanish mortgage or one that will come as close as possible to paying it off, as the bank will still expect the full amount from you in any case. If the shortfall is significant, the bank will be much more likely to pursue you for that amount. But the bank can legally attempt to collect any amount from you. The bank may collect money by placing liens on any and all assets of the homeowner. Although it may take years to collect on the shortfall by going through the court systems, the bank that holds your Spanish mortgage will not give up until they do.

If you must default on your Spanish mortgage, it is vital that you contact the bank as soon as possible to work with them. Doing so can result in an agreement that will satisfy the bank, relieve you of your responsibilities associated with the Spanish mortgage, and allow you to keep other assets you may own.