Congress Agrees that the Banks will Pay All Mortgage Costs, Except the Appraisal

13 November 2018 – Expansión

The political parties today agreed by majority that the new Mortgage Law will establish that notary expenses linked to the signing of mortgages will be paid by the banks and that the appraisal costs will be paid by customers.

Moreover, the notaries will carry out a questionnaire with each borrower to ensure that he/she understands all of the clauses in the mortgage contract, at no additional cost.

The Mortgage Law was presented again today at the Congress’s Economy Committee after the Government approved a royal decree law which stipulates that the Documentation Registration Tax (AJD) will be paid by the banks and not by customers.

The new Mortgage Law reflects that decision and makes it clear that the financial institution will pay for the first copy of the notary deeds; the customer will cover the cost of any copies he/she requests. Meanwhile, the registry costs will also be paid for by the bank; and the borrower will pay the appraisal expenses since he/she will be able to choose the appraisal company freely.

Nevertheless, several other important issues still need to be agreed, such as those relating to early repayment fees, late payment interest and the early termination clause of mortgages and which allows the foreclosure of homes depending on the debt that has been acquired by the borrowers (…).

On the other hand, the political parties will also have to decide about the entry into force of the new standards, given that the financial sector is asking for a margin of 6 months versus the 15 days that the draft bill is proposing.

The Mortgage Law, which is a transposition of a European directive, seeks to provide greater protection for consumers and promote transparency in the granting of mortgages, which is why the political parties have agreed that appraisal companies can be independent physical persons or legal entities (…).

Original story: Expansión

Translation: Carmel Drake

Spain’s Mortgage Market Heats Up, Led by Madrid & Barcelona

16 February 2018 – Eje Prime

The mortgage market in Spain is heating up again starting with its traditional strongholds: Community of Madrid and Cataluña. During the 11 months to November, those two regions, together with La Rioja and Cantabria, saw the highest increases in the number of mortgages constituted in the country.

Whilst Congress is still processing a new Mortgage Law, which looks set to introduce important increases in guarantees and transparency for bank users, the number of mortgages is picking up again across the country, with almost 401,000 operations formalised during the first eleven months of last year.

Between January and November, 69,885 new mortgages were signed in the Community of Madrid, according to data from Spain’s National Institute of Statistics (INE). That figure, the second highest in Spain (after Andalucía, the most populated community) represents an increase of 15.7% compared to the same period last year.

In the case of Cataluña, 61,831 mortgages were constituted, up by 10.5% compared to the first eleven months of 2016. Both regions outperformed the evolution across Spain as a whole, where the number of mortgage contracts signed increased by 7.8% between January and November last year.

Nevertheless, the rate of growth in both Cataluña and Madrid was surpassed by La Rioja, which saw an increase of 26.8%. Cantabria also performed well, with a 15.4% increase in the constitution of mortgages during the eleven months to November. Aragón, the Canary Islands, Extremadura and Navarra all saw decreases in the number of mortgages constituted in the period from January to November.

In addition to a rise in the number of mortgages, the average amount of mortgages is also gradually recovering. In November, for example, the average mortgage in the Community of Madrid amounted to €216,137 (the highest amount in the country given the more expensive house prices in that region), up by 9.8% compared to a year earlier. In the case of Cataluña, the average mortgage amounted to €166,191, up by 17.3%.

Far from the pre-crisis levels 

Although the tone of the mortgage market in Spain is recovering, the magnitudes are still well below their pre-crisis levels. In 2006, for example, more than 1.7 million mortgages were constituted in the country between January and November, for a higher average amount.

Since 2006, the average amount of mortgages in the Community of Madrid has fallen by 58.5% and, in the case of Cataluña, the decrease amounts to 58.5%. It just so happens that the decreases in both regions have been lower than the reduction across the country as a whole, where the average mortgage is now 78% lower than it was in 2006.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake

Sareb Sold Loans Worth €186M Online in 2017

11 January 2018 – Expansión

Sareb sold loans with a nominal value of €186 million through its online channel in 2017, according to a statement issued by the entity.

Last summer, the so-called bad bank, launched an initiative to sell non-performing loans through its website, whilst three of the servicers (Haya, Altamira and Solvia) implemented a similar plan through their respective “shop windows”.

By the end of 2017, Sareb had closed agreements to sell loans amounting to €35 million through its own online channel, plus €151 million in loans that the company sold through specialist managers.

In a pilot phase in July 2017, Sareb published a preliminary batch of non-performing loans on its website for an aggregated amount of €400 million and invited 30 professional investors to participate. It received non-binding offers for all of the loans up for sale and, in the end, 70% were converted into binding offers.

Now that the channel has been tested, Sareb has published a new batch of loans amounting to €550 million, with an average value of €13 million. The company hopes to receive non-binding offers from investors already registered on the platform during January.

During 2018, Sareb is expected to launch five more sales processes through the platform, of at least €500 million each, aimed at investors and professionals in the sector, as reported last summer.

In term of Altamira, Haya and Solvia’s shop window activities, almost 95% of the loans sold are backed by finished homes or land located in Cataluña, Andalucía, Madrid, the Community of Valencia and the Balearic Islands. The other loans are secured by offices in Madrid and hotel establishments in Gerona.

As at June 2017, the Spanish financial system accumulated non-performing loans amounting to €127.31 billion, equivalent to 16% of the total figure for the Eurozone, which amounted to €794.1 billion, according to data from the European Central Bank (ECB).

For the President of Sareb, Jaime Echegoyen (pictured above), the company has “the obligation” to innovate and contribute to boosting these types of transactions through the creation of new channels “accessing new kinds of investors and giving these assets more transparency”.

Original story: Expansión

Translation: Carmel Drake

Lone Star Will Sell Up To 60% Of Neinor When It Goes Public

8 March 2017 – La Vanguardia

On Monday, the US fund Lone Star announced its intention to initiate the flotation on the stock market of its Spanish subsidiary, the property developer Neinor Homes, with the sale of up to 60% of its shares. Neinor, which is due to debut on the stock market in April, will thereby become the first property developer to go public following the outbreak of the real estate crisis in 2007.

Market sources explained that Lone Star is valuing Neinor at around €2,000 million. The fund acquired the former real estate subsidiary from Kutxabank in 2014 for €925 million and then invested another €200 million in a capital increase in order to purchase land: with a cumulative investment of €1,100 million, the debut will allow the fund to capitalise on its commitment to the Spanish real estate sector in record time.

The property developer led by Juan Velayos (pictured above) explained in the preliminary documentation sent to the CNMV that the stock market debut will be performed in two phases. During the first phase, the firm will make a primary offer or IPO aimed at institutional investors, through which it hopes to raise €100 million, which it will use to reduce its corporate debt. It will then carry out a secondary offer, by selling shares that are currently held by Lone Star’s minority shareholders.

According to Neinor, the placement will leave between 40% and 60% of the company’s share capital as free float. Lone Star and the company itself have made a commitment to not undertake any additional sales of its shares for 180 days, whilst the management team led by Juan Velayos, the former CEO at Renta Corporación, has extended that commitment for a period of between one and three years.

Neinor owns land for the construction of 161 developments and 9,086 homes: as at December 2016, those plots had a gross value of €1,120 million and a gross development value of €2,548 million, which guarantees the company’s activity until 2021.

Since its creation, the company has been planning its IPO, applying standards of corporate governance, professionalisation and customary transparency in listed companies. Based on the valuation of €2,000 million that the placement firms are entertaining, Neinor will become the third largest real estate company on the Spanish stock market, behind only Merlin (with a capitalisation of €5,000 million) and Colonial (€2,450 million) and ahead of Hispania (€1,300 million) and Axiare (€980 million).

Original story: La Vanguardia (by Rosa Salvador)

Translation: Carmel Drake

NH Appoints 2 New Directors Despite Protests From HNA

22 June 2015 – Cinco Días

On Friday, the fund Oceanwood, which controls 7.58% of NH’s share capital, managed to take a seat on the hotel chain’s Board of Directors, despite HNA’s efforts to the contrary. HNA had tried to avoid the appointment of any new directors, by requesting the inclusion of an additional item on the agenda of the shareholders’ meeting, to limit the number of Board members to 11, even through the company’s bylaws provide for a maximum of 20.

The Chinese group HNA, which holds a 29.5% stake in the hotel chain, justified its proposal as being “in the interests of greater legal certainty”, even though the investment funds (other NH shareholders) had requested a seat on the board. HNA’s position meant that the funds’ entry depended on one of the existing seats being vacated.

Although the item (the vote regarding a reduction in the size of the Board) is still on the agenda of NH’s shareholders’ meeting, which will be held on 29 June, the management body decided to appoint two new directors on Friday, in support of their goal to strengthen “their commitment to transparency and good governance”. And so, Alfredo Fernández Agras was appointed as a proprietary director, at Oceanwood’s request, and Koro Usarranga Unsain was appointed as an independent director. These appointments must now be ratified by the shareholders.

Thus, NH has 13 members on its Board of Directors once more; the number had decreased to 11, after Intesa San Paolo’s exit from the hotel chain’s share capital. The company said yesterday that “the new governance structure strengthens the composition of the Board of Directors over the long term and achieves representation of all stakeholders in line with best corporate governance practices”. According to the company, the decision was taken by “unanimous vote of all of its Board members”.

The fund Oceanwood acquired capital in the hotel group after Santander placed 8.5% of its capital in the market. Santander had, in turn, received the stake from Grupo Inversor Hesperia as payment for some of its debt. BlackRock and Henderson then also became shareholders. These funds requested that NH’s Board strengthen the role of its independent directors to prevent the Chinese group HNA from strengthening its stake and position on the management body, without launching a takeover – it is not obliged to do so until its shareholding exceeds 30% – . HNA has four seats on NH’s board, compared with Hesperia, which has two.

Original story: Cinco Días (by L.S.)

Translation: Carmel Drake

Hispania Enters The FTSE EPRA/NAREIT Index

9 June 2015 – Hispania Press Release

Hispania Activos Inmobiliarios, S.A., (hereinafter, Hispania), announces its inclusion in the real estate index FTSE EPRA / NAREIT, the main benchmark for European real estate. Hispania’s inclusion in the index will become effective from 22 June.

The FTSE EPRA/Nareit Global Estate Index is an indicator managed by the European Public Estate Association (EPRA) that is designed to represent general trends in real estate equities worldwide. In order to form part of the index, companies must: generate a significant gross operating profit (EBITDA) from real estate; report their audited annual accounts in English; comply with a minimum specific liquidity requirement; and have a minimum free-float market capitalization.

The members of this index share standards of financial information between each other and with investors, as well as information about corporate governance practices. Hispania’s membership of this index will increase its visibility to international investors and provides a seal of quality and transparency in the global field of listed property.

Original story: Hispania Press Release

Edited by: Carmel Drake