Spanish Court Rules Repossession Clears Mortgage, El Pais Says
A court in Navarre, northern Spain, ruled that the proceeds from the sale of a home repossessed by Banco Bilbao Vizcaya Argentaria SA are sufficient to clear the former owner’s mortgage debt to the bank, El Pais reported.
BBVA sued the borrower to reclaim 28,129 euros ($38,582) of debt outstanding on a 71,225-euro loan after selling the property for 42,895 euros. Under Spanish law, mortgage lenders have a claim on all a borrower’s assets and not just their home, El Pais said. BBVA plans to appeal, it added.
The judge ruled that the house’s fall in value was a direct result of the financial crisis that stems from financial mispractice and it was "morally repellent" that the bank should make additional claims on the borrower, the newspaper said.
The case raises the possibility of claims from hundreds of thousands of borrowers who have been left with debts after their homes were repossessed over the past three years, the newspaper said.
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