Your Foreign Mortgage: What Happens If You Don’t Pay?

By on August 8th, 2018

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If you don’t pay your mortgage overseas it is likely to have the same consequences as if you didn’t pay your mortgage in your home country.

Some with mortgage debt in Europe hope that it will not follow them to the UK or Ireland.

However, this is incorrect, and the foreign lender can legally come after you for outstanding debt.

Consequences If You are in Negative Equity

EU Property Solutions regularly see borrowers with a mortgage greater than the house value stop paying and leave the keys with the lender.

Many of these borrowers do not know that they are in negative equity and are putting themselves in serious jeopardy as the outstanding debt can be aggressively pursued back in their home state.

If you don’t pay your mortgage, arrears will mount on your account and following a period of greater than three months your lender can commence repossession proceedings. Many courts in Europe are inundated with repossession cases so the process may take some time.

Once repossessed your lender will then likely market the property. Many properties sold in possession are purchased at a far reduced value often around 60 of open market value. This can increase losses for both the Bank and the borrower.

When the Bank sell the property, you will be left liable for any shortfall balance if the property was in negative equity and this can be collected by lenders in your home country. We have seen instances when lenders have appointed UK Solicitors or Collection Agents and placed a second charge on a borrower’s home. This is something EU Property Solutions can assist with.

Important Advice

It is essential that you do not ignore your lender and to liaise with them if you have any issues paying your mortgage, if not your home assets are at risk.

EU Property Solutions assist borrowers with Property Debt Issues across Europe. Our main area of expertise is in Spain, Portugal and Cyprus but we are obtaining successful settlement across the continent. If you or anyone you know is having debt issues in Europe please call us today 0330 124 1230 to arrange a free initial consultation.

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