Residential Mortgages Begin to Level Out After Mortgage Law

3 January 2020 Spain’s banks issued a total of 29,691 residential mortgages in October, a fall of 2.1% compared to the same month of 2018, according to data published by the country’s National Statistics Institute (INE). Issuance, therefore, fell for the third straight month, though the reduction was limited to the two previous months. The value of the average mortgage rose by 1.1% to 129,237 euros.

The average interest rate on residential mortgages stood at 2.50% (5.0% lower than in October 2018), with an average term of 24 years. Variable-rate mortgages accounted for 54.7% of the total, while fixed-rate mortgages made up the rest.

The mortgage law of last year hit the market and experts believe that the issuance is beginning to return to “normal” levels.

En español

Los bancos españoles emitieron un total de 29.691 hipotecas residenciales en octubre, una caída del 2,1% en comparación con el mismo mes de 2018, según datos publicados por el Instituto Nacional de Estadística (INE). Las emisiones cayeron por el tercer mes consecutivo, aunque la reducción se limitó comparado a los dos meses anteriores. El valor de la hipoteca media aumentó un 1,1% a 129.237 euros.

La tasa de interés promedio de las hipotecas residenciales se ubicó en 2.50% (5.0% menor que en octubre de 2018), con un plazo medio de 24 años. Las hipotecas a tasa variable representaron el 54.7% del total, mientras que las hipotecas a tasa fija constituyeron el resto.

La ley de hipotecas del año pasado sacudió el mercado en 2019. Ahora los expertos creen que la emisión está comenzando a volver a los niveles “normales”.

Original Story: El Boletin – E.B.

Translation/Summary: Richard D. Turner

CarVal Hires Pepper to Manage Portfolio of 10,000 Mortgages

28 October 2019 – CarVal Investors has hired the Pepper Group to manage the portfolio of 10,000 mortgage loans it acquired this year from Blackstone. The US firm sold the portfolio to CarVal in July for nearly one billion euros, in its first major divestment of the last five years.

Pepper will manage the mortgage portfolio starting next year, taking over from Blackstone itself. The Australian Pepper group offers financial services and currently manages more than €30 billion in loans. It has been operating in Spain since 2006.

Original Story: Vozpópuli – Alberto Ortín

Adaptation/Translation: Richard D. K. Turner

Euribor Falls to New Record Low

20 August 2019

The 12-month Euribor benchmark interest rate, which is used as a reference to set Spanish mortgages rates, fell to a new low of -0.398% last week. The rate first fell into negative territory in February 2016, as the European Central Bank’s (ECB) policy of quantitative easing looked to boost the Eurozone economy.

Euribor seemed to have hit bottom in March 2018, at -0.191%, when analysts began predicts gradual increases in the rate until potentially hitting zero in 2019. However, after rising to -0.108% in February, Euribor began falling again due to fears that the growth in the Eurozone was once again faltering.

Original Story: El Confidencial

Adaptation/Translation: Richard D. K. Turner

Blackstone Nears Sale of €950-Million Loan Portfolio

3 July 2019 – Richard D. K. Turner

The British fund CarVal Investors, a leading global alternative investment manager focused on distressed and credit-intensive assets, is said to be leading the race to acquire a €950-million portfolio of mortgages from Blackstone. Goldman Sachs and Elliot Management are also participating in the sale.

Original Story: EjePrime

 

Moonlake Capital Launches a Vehicle to Invest €600M in NPLs

27 May 2019 – Eje Prime

Moonlake Capital is going to launch a vehicle to invest €600 million in large portfolios of non-performing loans in Madrid, Barcelona, the Costa del Sol, the Balearic Islands, Valencia and Sevilla.

The new vehicle will operate as a servicer for the fund and so will manage and divest the portfolio of properties that the banks were left with after their owners were unable to keep up the repayments on their mortgages.

As such, the investment group created in 2016 and headquartered in Madrid will enter the market to compete with the likes of Servihabitat, Altamira, Solvia and Haya Real Estate, amongst others.

In parallel, Moonlake is also planning to create a joint venture with an as yet unidentified investor to develop a 2.5 million m2 project in Málaga’s technology park, involving the construction of 5,000 homes, 110,000 m2 of industrial warehouses and 30,000 m2 of commercial premises.

Original story: Eje Prime (by Marta Casado Pla)

Translation/Summary: Carmel Drake

Unicaja Negotiates Sale of 3,700 Refinanced Mortgages Worth €250M

24 April 2019 – El Confidencial

Unicaja Banco could become one of the first entities in Spain to sell refinanced mortgages whose borrowers are now up to date with their payments.

The Málaga-based entity has engaged EY to coordinate the sale of 3,700 doubtful loans worth €250 million. The mortgages went unpaid during the crisis and were all refinanced, such that the borrowers are now up to date on their payments.

To date, barely any Spanish entities have tried to sell assets of this kind. But pressure from the ECB to improve returns is forcing Unicaja to give it a shot. The mortgages are still classified as doubtful, since the Bank of Spain establishes that a borrower has to pay 12 monthly instalments and reduce some of the capital for a loan to be considered normal.

The sale of the mortgages by Unicaja has been called Project Biznaga and forms part of a larger asset divestment process being undertaken by the entity, worth around €1 billion. The sale is generating a lot of interest amongst international investors and is going ahead in parallel to the bank’s merger negotiations with Liberbank, which are in their final stages.

Unicaja has one of the lowest exposures to problem assets in the Spanish financial sector and the highest levels of coverage. According to the latest official figures, as at December 2018, it had €3.6 billion of foreclosed and doubtful assets and a coverage ratio of 57%.

Original story: El Confidencial (by Jorge Zuloaga)

Translation/Summary: Carmel Drake

Spain’s New Mortgage Act will Enter Into Force on 17 June

18 March 2019 – Expansión

The new Mortgage Act was published in the BOE on Saturday and it will enter into force in three months time, on 17 June 2019.

The legislation reflects an EU directive, which seeks to increase the transparency of mortgage contracts to try to reduce the high rates of litigation in the banking system.

It means that Spanish legislation will, for the first time, require the banks to bear all of the costs associated with the formalisation of a mortgage, except for those relating to the appraisal/survey.

The Bank of Spain agrees that the new law should reduce the number of litigation cases but voiced concerns that it will also make new loans more expensive.

Original story: Expansión

Translation/Summary: Carmel Drake

INE: Mortgage Lending Rose by 16.5% YoY to €42.7bn in 2018

27 February 2019 – La Vanguardia

Last year, 345,186 mortgages to purchase homes were signed in Spain, up by 10.3% compared to 2017, but the banks again refrained from fully opening the financing tap: the average loan amount increased by just 5.6% to €123,727, according to data presented on Wednesday by Spain’s National Institute of Statistics (INE).

The growth in the average amount is only slightly higher than the increase in house prices (which rose by 3.9% on average last year, according to data from the Ministry of Development, albeit by much more in the large cities and their metropolitan areas, where the bulk of demand is concentrated). “The banks are adopting a conservative strategy, that’s for sure”, said Oscar Gorgues, Manager of the Chamber of Urban Property in Barcelona – “because they are still very mindful of the excesses of the boom years. For that reason too, we can say that the real estate market is healthy and there is no risk of a bubble”.

The data from INE shows that after five years of recovery in the real estate sector, the number of mortgages granted is still 71% lower than the 1.24 million mortgages granted by the banks in 2007, the last year before the burst of the real estate bubble.

According to real estate firms, the caution on the part of the banks means that the main factor causing families, and especially young people, to rent, is the fact that it is impossible for them to obtain a mortgage loan. By contrast, according to the real estate firm Forcadell, around one third of homes are now purchased without a mortgage, in operations undertaken by investors (…).

According to data from INE, the value of all of the new mortgages constituted to purchase homes last year amounted to €42.7 billion, up by 16.5% compared to 2017, due to the combined effect of increases in the number of operations and the average loan amount (…).

Original story: La Vanguardia (by Rosa Salvador)

Translation: Carmel Drake

S&P: House Prices will Rise in Spain by More than in Other Major Eurozone Economies

24 February 2019 – La Vanguardia

House prices in Spain are going to continue rising for at least the next three years, although the rate of growth will slow down as the economy loses momentum and the European Central Bank (ECB)’s monetary policy normalises, according to forecasts from the agency S&P Global Ratings, which points to larger rises in the Spanish real estate market than in the other major Eurozone economies.

According to the ratings agency, house prices in Spain, which registered an estimated nominal rise of 6.6% in 2018, will increase by 4.5% this year, by 3.4% next year and by 3% a year later, although S&P warns that if prices continue to grow by more than the expected incomes of households, then access to housing will continue to worsen over the coming years.

In this sense, as a result of the deep fall in real estate prices in Spain during the crisis, access to housing is still at better levels now than it was before the burst of the real estate bubble, with a ratio of prices with respect to income that is 29% lower than the maximums observed in 2007, albeit 25% higher than the long-term average.

Similarly, S&P considers that the low interest rates applied to mortgage loans for the acquisition of homes will continue to serve to support access to housing in Spain, indicating that, given the rise in inflation between May and October 2018, real rates became negative.

In addition to Spain, the agency forecasts that real estate price will continue to rise across the Eurozone, although at a lower rate than in previous years, with the exception of Italy, where an increase of 0.5% is expected this year, which will accelerate to 1.3% in 2020 and to 1.6% in 2021.

In the case of Germany, prices will rise by 3.9% in 2019, although those increases will moderate to 3.3% and 3% in the subsequent two years, respectively, whilst in France, house prices are predicted to rise by 2.4% this year and by 2% in the following two years (…).

Original story: La Vanguardia 

Translation: Carmel Drake

Unicaja Sells Problem Assets to Cerberus & AnaCap for €120M

23 January 2019 – Eje Prime

Unicaja is divesting its toxic assets. The Málaga-based entity sold two portfolios of problem assets amounting to €330 million to Cerberus and AnaCap at the end of 2018. In this way, it managed to clean up its balance sheet and improve its accounts for last year, ahead of the merger with Liberbank, reports El Confidencial.

The problem assets consisted of one portfolio of mortgages amounting to €230 million, which were sold to Cerberus and another portfolio containing property developer loans amounting to €100 million, which was acquired by AnaCap.

According to the latest published accounts, Unicaja held €3.9 billion in problem assets (flats, land and unpaid loans) as at September 2018, and so the two portfolios sold account for more than 8% of the total. In the market, it is estimated at the Málaga-based bank obtained proceeds of around €120 million in exchange for the sale of the two portfolios.

Original story: Eje Prime

Translation: Carmel Drake