zeroxzero February 22nd, 2012 at 10:27 am
Phil: What is your current view on real estate? The only noteworthy item that I've come up with in the morning scan is the term "dacion de pago", with which I was unfamiliar, which is the cancellation of a debt upon returning the collateral..
The principal Catalan newspaper is reporting today that the following proposal has been agreed between the current [Rajoy / PP] government and the banks & savings banks, and will be put to the legislature as soon as the proposal is finalized. In effect, Spanish families with 1/ low income, and 2/ all wage earners unemployed, can return the title of a mortgaged house to the bank in exchange for cancellation of the mortgage indebtedness ["dacion de pago"] without being forced to leave the house, provided it is the family's principal residence. There will also be a mitigation of any "penalty" interest accrued for non-payment.
The bank will be forced to recognize the debt on its balance sheet and make provisions for it's non-payment. Details of income levels and unemployment status have not yet been finalized. Up to now, the indebted homeowners were ejected from the house for non-payment of the mortgage, while remaining liable to the bank for the debt. I thought this might be of interest to those of us scratching our heads about U.S. housing and banking.
February 22nd, 2012 at 10:27 am
Phil: What is your current view on real estate? The only noteworthy item that I've come up with in the morning scan is the term "dacion de pago", with which I was unfamiliar, which is the cancellation of a debt upon returning the collateral..
The principal Catalan newspaper is reporting today that the following proposal has been agreed between the current [Rajoy / PP] government and the banks & savings banks, and will be put to the legislature as soon as the proposal is finalized. In effect, Spanish families with 1/ low income, and 2/ all wage earners unemployed, can return the title of a mortgaged house to the bank in exchange for cancellation of the mortgage indebtedness ["dacion de pago"] without being forced to leave the house, provided it is the family's principal residence. There will also be a mitigation of any "penalty" interest accrued for non-payment.
The bank will be forced to recognize the debt on its balance sheet and make provisions for it's non-payment. Details of income levels and unemployment status have not yet been finalized. Up to now, the indebted homeowners were ejected from the house for non-payment of the mortgage, while remaining liable to the bank for the debt. I thought this might be of interest to those of us scratching our heads about U.S. housing and banking.