Spanish Banks Offload Properties By Mortgage Offers

Spanish Banks Offload Properties By Mortgage Offers

Michael Liggan from Altavista Spain thinks that this could produce some interesting deals for clients willing to seize the opportunity. The basic quandary for the banks is that when they issued the mortgages, the homes were valued a lot higher than the current market price. To make their books add up they don't want to drop the prices but keep them high and offer better, or at least more tantalising, mortgages. Interested? Read on!

Apparently now is a great time to buy Spanish property as the banks once again play games with their balance sheets. When the financial crises struck the Spanish property market, the banks avoided making massive write-downs by converting the loan assets into hard assets the homes the loans were on.

This was a great idea at the time but now the 59.7 billion euros worth of homes on the Spanish banks' books have become as big-a-burden as the troubled loans they were swapped for, and the banks are now offering crazy mortgage deals including no-money-down, ridiculously low teaser rates and long deferral periods of up to 3 years.

This has been triggered by the Spanish central bank forcing banks to increase their loan loss provisions against their property assets within a few months, because of a fear that Spanish banks haven't properly set up reserves against the risk of their vast property holdings.

Given that increasing loan loss provisions would force Spanish banks to recognize losses in their income statements, many are now eager to sell off their houses.

The banks are once again delaying the inevitable, because loans like this are almost certain to have a high default rate, but the banks know that this won't have to be dealt with for a few years.

Thoughts on the banks doing this aside, it could present a good opportunity for buyers. Looking at the UK property market now, the recovery is being severely hampered by the fact that only those with a deposit of 10% or more can secure a mortgage. It certainly doesn't look like this will be a problem shared by Spain.

This may also go some ways against the repossession problem, because the properties going hand in hand with these favourable mortgages are obviously being sold at a reasonable market value, rather than rock-bottom pricing seen with repossessed properties in Spain.

www.property-abroad.com

www.altavistaspain.com

POST COMMENT

How Fast Payday Loans Live Up To The Expectations To Find a Good Mortgage Broker, Here Are 4 Effective Steps Fast Text Loans - No Hassles of Standing in Long Queues Availing Payday Loans made easier and convenient Instant Decision Loan – Decide upon a loan and avail it instantly Things To Know Before Applying For Mississippi Payday Loans Cheap Personal Loans - Avail Money on low rates of interest and tide over crisis Choosing The Right Payday Loan Lender Car Loans India Showcasing Your Personality With Bank Checks One hour bank transfer payday loan: A deal that surprises you Payday loans today: Wonderfully end your unexpected fiscal issues 3 month payday loans: A favorable option to overcome financial hassles