The Euribor resumes its historic minimum levels… and could continue falling.

No one thought two months ago that the Euribor could drop even more than in December. But finally this mortgage rate has broken the mould in order to close March at 0,54%, its lowest level in history. And the most important thing is that the discounts these descents could cause on mortgages might continue in the next few months.

The Euribor at 12 months, the mortgage indicator to which most mortgages in Spain refer to, has caused more happiness to all holders of mortgages saying good bye to the month of March at its lowest level in history, 0,54%. (…)

Source: Expansión

The number of homes in Spain reaches 26.018.179, 24% more than a decade ago

The Ministry of Infrastructure estimates that at the end of 2011 the number of homes exceeded 26 million (26.018.179 homes), which means five million more than in 2001 or 23,7% more. The number of residents in Spain increased between 2001 and 2011 by 5,9 million people (5,8%), which means that practically a new home was built for each new inhabitant.

Although it is the National Institute of Statistics (NIS) who provides the information on the population and the number of homes for the end of 2011, the Ministry of Infrastructure also carries out its own estimate of the number of homes in Spain. (…)

The Ministry calculates that there were 26.018.179 homes at the end of 2011, while there were 21.033.759 homes in 2001. If this figure is compared to the one provided by the NIS in 2001, there is hardly a difference of 87.200 homes, which proves that the survey of the Ministry is very similar to the one carried out by the NIS.

Should we divide the population of 2011 (46.816.915 Spaniards) by all existing homes, there would be a result of 1,79 persons. The highest increase in number of homes has been in Murcia, with an increase of 37,7%, followed by La Rioja, with an increase of 30,6% and Castilla-La Mancha, with an increase of 30,4% when compared to 2001.

On the other side, the regions with less new homes would be the Basque Country, Extremadura and Aragón.

As for the number of empty homes, it could reach 3,5 million Euros, as declared by experts consulted by the Cinco Dias. In 2001 the proportion of empty homes on the total was of 14,8%.(…)

Source: Idealista

The Government rejects the assignment in payment but reinforces debtors.

The Government has finalized its mortgage reform. After two royal decrees and a sentence from the Court of Justice of the European Union (CJEU), the Popular group in Parliament presented its amendments to the draft of the Law that regulates the assignment in payment, the standstill of evictions and the social rental. And there are important novelties, in order to make it more difficult for banks to expel those in risk of social exclusion from their homes.

Nevertheless, the retroactive assignment in payment will not be generalized, as demanded by the Popular Legislative Initiative (PLI). “The assignment in payment will only limit itself to the Code of Best Practices of banks, and only as a last resort”, governmental sources declare. That is, for families with an annual income below 25.300 Euros and with special social circumstances who might have tried to restructure their debt, without any success, as established by the said code.

The amendments of the PP reinforce the out-of-court eviction process. Up to now, only the creditor could request this process. Now the debtor will also be able to request that the notary decides on this matter.

Prior to this law, it was not possible to claim the paralyzation of the eviction due to the existence of abusive clauses in the mortgage. Neither this is possible. And the notary can suspend the out-of-court sale when it can be proved that an abusive clause has been claimed before the judge.

These measures comply with all matters requested by the CJEU.

The amendments of the PP establish that “whenever a court estimates that some of the clauses could be abusive, it will hear both parties in the next five days. Once they have been heard, it will decide in the next five days”.

It would either paralyze the eviction “or an indemnity would be agreed”, as assured by sources from the Ministry of Economy. For example, the judge could take these clauses into account when calculating the pending debt (by deducting from the debt the abusive late payment interests that had already been paid).

Up to now the mortgage debtor was not able to claim that the clauses were abusive until the process had finished.

The proposal of the PP also increases the cases in which families can benefit from an automatic paralyzation of the eviction for two years. Those handicapped debtors, or with an illness that makes them unfit for work, in a situation of dependence or with handicapped children will have an income limit of 25.300 Euros instead of 19.000 (the rest) and 16.000 (the current limit).

The Government has established that one non-payment is not enough to start the eviction process, three will be necessary.  This change, considered “very important” by the Government should prevent the flow of evictions on families that cannot face the mortgage on their home.

Late payment interest rates will also be limited to 12% (three times the legal interest of money). And this not only on the accrued interest, but also on the non-paid one. It will therefore have a retroactive effect. This will alleviate all those affected.

Conclusion: “With these amendments there will be no further cases similar to the one that originated the sentence of the European Court”, governmental sources declare.

Source: Expansión

Bancaja Habitat bought land with an overprice 50 times higher.

False valuations, fraudulent acquisitions of assets and irregular transfers of hundreds of millions of Euros. These are some of the points included in the lawsuit filed by the Banking Restructuring Fund (Frob) against former managers of Bancaja and Banco de Valencia and the business man Ramón Salvador. According to it, Bancaja Habitat would have paid an overprice 50 times higher in order to acquire land not intended for building from the accused business man.

“Several million Euros have been paid for plots that had nearly no value, or 98% lower than the one included in the deeds, due to the fact that they had been valued as perfectly usable”, the lawsuit declares. “Most of the acquired assets were subject to the compliance with the building plans, the approval of building and subdivision projects or they were land not intended for building pending to be part of a Housing Development Partial Plan”, the document drafted by the lawyer appointed by Frob, Carlos Gómez-Jara, adds.

(…) The Frob demands that all the accused should pay a joint bail of 226 million Euros, based on the presumed losses inflicted on Bancaja and Banco de Valencia.

The lawsuit also denounces the existence of “false valuations” in operations between the Valencian group and Ramón Salvador.

(…) The Fund also denounces that some of the operations agreed between Salvador and the Valencian institutions were carried out without being approved by the board of administration of the bank and the savings bank.(…)

The lawsuit insists that these presumed irregular activities are even more serious as they took place when the real estate bubble had already burst. It also adds that “it is even more surprising that some of these operations took place the same year that Banco de Valencia was being placed in administration of the Bank of Spain”. (…)

Source: Expansión

Sareb will close the worst year of the crisis “in the red”.

In 2013, the year where according to all economic forecasts Spain should reach the bottom line of its crisis, the bad bank, Sareb, will generate losses for its shareholders, among them the Spanish tax payers, who control 45% of its capital. This is foreseen in the five year business plan presented by the company yesterday in Madrid.

It is not easy to draft a five year strategic plan for a real estate company in Spain, with the uncertainty of the current context. This is why the managers of the bad bank have chosen to draw different scenarios to calculate their possible profitability, recognizing that this year the company could generate losses, taking into account that it has not worked at its full capacity until February, Walter de Luna, its general director, declared in the presentation of the plan to the press.

Nevertheless, he clarified, when the company is liquidated, in 15 years, the annual profit for the public and private shareholders will be between 13% and 14%, a percentage which is in line with the forecast made by Frob last October.

In spite of the recession, the team lead by Belen Romana is planning to accelerate the sale of assets during the first five years of operation and will take advantage of the network of branches of the financial institutions that have transferred assets in order to do so. Sareb´s management considers that the individual customer is one of the potential purchasers of most of the 76.000 empty properties the bad bank has in its balance, either by acquiring or renting them. Right now, the company has around 6300 rented properties in its balance.

Sareb is also negotiating with institutional investors in order to sell packages of land, properties and portfolios of loans in the next few months.

These operations will be closed at “market prices” and the flow of activity will not be uniform all months, Romana explained, clarifying that Sareb´s market share will be of 4%, which will prevent it from determining which will be the property prices in Spain.

Romana also declared that it hopes to have the due diligence ready for the summer, which has been commissioned to a group of companies that will revise the status of its 197.474 assets transferred from nationalized banks and worth 50.449 million Euros.

Source: El Mundo

Bankia sells Finanmadrid and a portfolio of 870 million Euros to Apollo.

Bankia continues with its disinvestments. The bank presided over by José Ignacio Goirigolzarri closed the sale of its consumer credit subsidiary, Finanmadrid, and a portfolio of credits of 870 million Euros to the fund Apollo.

This is the biggest operation ever by an American investor in Spain. This agreement, advised by Arcano and Linklaters, includes the transfer of 124 employees who make up the platform of Finanmadrid. Bankia is also working on the reduction of its staff with the transfer of employees.

The bank is also studying the sale of the platform Bankia Habitat, with 500 employees. The institution valued the the sale of Finanmadrid in 1,6 million Euros, although this amount only includes the transfer of the platform and not the credit portfolio, according to financial sources.

The package of credits would be made of nearly 700 million Euros in up-to-date loans, and another 170 million Euros in default loans. These last ones will be paid with discounts of 95%. Meanwhile, the existing credit is bought with an average discount of 20%. If these figures are maintained, the price of the operation as a whole (platform plus credits) would reach more than 500 million Euros.

This disinvestment is one of the commitments reached by Bankia with Brussels. The operation will generate a positive impact on the group´s capital of 10 million Euros. For Apollo, it will mean the reinforcement of its presence in Spain and the chance to become a competitor within the segment of consumer credits.

Source: Expansión

Fortress, Appollo and other funds wish for the business liquidated by the nationalized institutions.

Credit portfolios, recovery businesses, real estate divisions and now, the business in liquidation. The restructuring imposed by Brussels to the nationalized institutions – Bankia, NCG Banco and Catalunya Banc – has turned out to be a substantial business for foreign funds and banks. Some of these investors have met in the last few weeks showing an interest in the business being liquidated: credits, branches and staff.

If there are no last minute changes, the first serious offers will arrive in the next few weeks. A public tender cannot be dismissed in view of the growing interest.

These are potential operations that offer great advantages for both parties. The nationalized institutions can maintain part of their staff, avoid the economic and social cost of layoffs. The funds have the opportunity of acquiring credits and commercial and recovery teams at bargain prices, as well as some agreements on the provision of services.

The three bigger nationalized institutions are obliged by Brussels to reduce the credit volume in nearly 100.000 million Euros in the next few years (until 2017); its staff in more than 8000 workers; and its commercial network in more than 2000 branches. These cuts provide a business that the funds do not want to lose.

The reductions which interest the foreign investors most are the ones to be carried out in the expansion areas, entered by the savings banks in the last years of the real estate boom.

In the case of NCG Banco, the Galician institution has around 200 branches far away from the area considered strategic by Brussels. Nearly 120 of these belong to EVO Banco and would not be included in the type of operations sought by funds and 60 are included in the Management Unit of Single Assets (MUSA). The Galician group has received a lot of interest on this unit, which would also include 60 branches, 900 professionals and credits for 20.000 million Euros. Nevertheless, sources from the institution declare that their initial priority is to sell EVO Banco. Out of these 20.000 million Euros, half of them would be healthy credits and the other half default credits.

Some funds prefer to concentrate on the recovery teams and the default credit portfolios. They would then continue providing a recovery service to NCG Banco and they would acquire some of the default credit portfolios included in the unit MUSA.

Other funds are preparing offers for those healthy credits awarded outside the strategic region of NCG: Galicia, Leon and Asturias. Should these operations be closed, the acquirer would be in charge of managing the current credits, but would not grant further loans or deposits.

Along with NCG Banco, the funds and financial institutions are studying the possibility of acquiring part of the commercial network of Catalunya Banc. Brussels imposed the closure of 400 branches, 35% of all it had at the end of 2011. It also has the obligation of closing any business outside Catalonia and part of the one within the region, mainly in the provinces of Lerida and Gerona, according to financial sources.

Bankia has already closed the sale of non strategic assets. It has been done partly to save jobs, such as with the sale of Finanmadrid to Appollo, with the transfer of 124 people, or with Bankia Habitat, on sale with a staff of 500 employees. The troika has allowed Bankia to maintain part of its network in its natural area of influence. It was national since the very beginning, and therefore it will not need to leave any region. But Bankia still has to close 1100 branches and get rid of 4500 employees. The institution already has requests for early retirement buyouts for 3000 employees.

Source: Expansión

Judges carried out 46.400 evictions in 2012, 14% more.

The foreclosures initiated by judicial bodies have increased by 368,7% during the five years of the crisis (2008-2012) when compared to the previous five ones (2003-2007), so they have multiplied by more than four and have registered an average annual increase of 73,7%, according to the figures of Judicial Statistics of the General Council of the Judiciary.

(…) According to these figures 20,3% of the foreclosures were carried out in Catalonia, while 19,6% took place in Andalusia, 17,6% in the region of Valencia and 10,1% in Madrid.

(…) When revising these figures, the General Council of the Judiciary reminds that the evictions may affect different types of buildings, not only homes, and the fact that the eviction is requested does not mean it can afterwards be carried out.

(…) On the other side, the judge Jerónimo Alonso Herrero, holder of the court number 3 in Arrecife (Lanzarote), has ruled the first decision in Spain to paralyze an eviction, as advanced by El Mundo. (…)

Source: Expansión

Sareb foresees losses only during its first year of operation.

Sareb foresees in its business plan that it will have losses only during its first year of operation. Belen Romana, president of the so called “bad bank” and Walter de Luna, its general director have explained this in a press conference after the approval of the revised business plan by its managing board.

Romana has insisted that Sareb will be “another player” in the real estate sector, and will not determine prices. “We will not generate the prices, we will be an actor that will compete with the others and we will send at market prices in order to attain our objectives”, he has pointed out.

On Wednesday the managing board approved the business plan that will be in force during the 15 years of operation of the institution, with detailed information about the acquired portfolio of assets – from group 1 (Bankia, Catalunya Banc, NCG Banco-Banco Gallego and Banco de Valencia) and group 2 (Liberbank, BMN, Ceiss and Caja3), as well as the features of the emissions of guaranteed and subordinate debt.

The approved business plan (…) defines that three quarters of the income will come from the sale of real estate assets, and the rest from loans.

In its first five years of operation, Sareb plans to sell half of its portfolio of properties, around 42.500 units. It also plans to set aside some properties for the rental market.

The plan also contemplates an accumulated profit for the shareholders between 13% and 14%, similar to the one established in the initial document.

The approval of the business plan is an important step in the short existence of Sareb and allows the company to concentrate on the management of its assets, once the capital structure and the composition of the shareholders have been completed.

The approval also complies with one of the recommendations issued by the IMF and the European Commission who, in their last report on the Spanish banking restructuring, valued the importance of a “robust and credible” business plan in order to lay the foundation of Sareb´s success.

The board of administration has also approved the Policy of Conflicts of Interest and of Linked Operations, which intends “to preserve at any time the interest of the company in the decision making by the managing directors of the company”.

As indicated by Sareb, this policy goes beyond “the demand of abstention imposed by the Law of Corporations, as it prevents that those members of the board affected by a conflict of interest may have access to the information concerning the operation or decision being discussed”.

Additionally, it establishes a system of periodical communication of activities which will allow the prevention and detection of potential conflicts.

Source: Expansión

Guindos will empower judges to paralyze evictions.

The Spanish judges will be able to paralyze the foreclosure processes in order to analyze if the clauses of the agreement are abusive for the consumer. The Minister of Economy and Competitiveness, Luis de Guindos, declared this in two parliamentary answers within the control session in Congress.

(…) “We will incorporate the sentence from the European Court of Justice in whole; we will modify the procedure so as to allow a suspension process so that the judge may consider if there are abusive clauses, and we will also define the term “abusive clauses”, Guindos assured.

In spite of this, the socialists and the Catalans demanded that the Government paralyzes all foreclosures from now on until the modification of the norms has taken place.

The Government has carried out a draft of a law against evictions and plans to include the modifications during its processing. But Guindos made it clear that the mortgage law is valid and that there are no plans of reforming it completely. In his opinion, the sentence “does not declare the Spanish mortgage law illegal nor does it disqualify it”, but it “declares that the Spanish law does not comply with the Directive on consumers”, he declared.

In reality, there are many abusive clauses that banks are presumably applying, such as the late payment interest rates.(…)

Source: Expansión