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The press has reported how a Court in Northern Spain has passed judgement to rule how the proceeds of the sale of a property repossessed by BBVA, are enough to clear the former owners mortgage debt.
Banco Bilbao Vizcaya Argentaria (BBVA) repossessed the property in question and then sued the previous owner in an attempt to recover the 28'129 Euros of the debt that it claimed remained unpaid from a 71'225 mortgage. Spanish law currently dictates that mortgage lenders can make a claim against all assets of a borrower - not just their home. BBVA eventually sold the property for 42'895 meaning that this sum, together with the repayments that the previous owners had made, effectively cleared the mortgage
El Pais reported how the judge ruled that the fall in value of the property was largely due to the economic downturn and the collapse of the property market, due to mismanagement of the financial market as a whole, and that it was immoral of BBVA to capitalise on this.
BBVA plans to appeal against the decision, but the case may set a precedent for future victims of repossession, and even raises a question mark over the incidences where properties have been repossessed and similar claims made over recent years.
The Bank of Spain revealed data in a report released earlier on this week, showing how bad debt with Spanish banks has increased significiantly over recent months, reaching an almost 10 year high.