Apocalypse (mortgage) Now

Apocalypse (mortgage) Now

This title and the background of the entrance have been going through my mind for a while; I was missing the form.

The contest of creditors of the real estate Nozar has given me the excuse and the Spartan-caciquil attitude of many banks in their risk analysis for the granting of mortgages has been the stimulant.

Never in my relatively long professional life in the banking world had I seen what is being seen now. Look that I have been a risk analyst for Zaragozano about 10 years ago, which were other times. But so incredibly demanding and disinterested in approving asset operations (loans), I had never seen it.

The last operation in which I intervened


A mortgage of some good friends, of new construction and with significant contribution of funds, was not approved by the Caja that had the promoter loan (in fact they are still waiting for the director to call them to see if they charge or not), many entities denied it by providing guarantors and also signed up providing a second guarantee (the house of one of the parents). And the headlines were fixed and old enough.

We missed giving pirouettes and dancing the Conga.

The mortgages that are approved today are at 80% appraisal (with appraisals that have fallen by 30%), with contribution of funds and, since appraisals are so low and go to 80%, a double guarantee is almost always needed . How many couples in Spain meet these requirements?

Much less than unsold homes, I think.

Much less than unsold homes, I think.

If I am outraged that the Bank does not exercise one of its economic and social functions (channeling savings towards investment), I am more outraged at the strategy I intuit from what I see and hear. The homes of the developers remain (among other things because they do not grant subrogation mortgages to end customers) and only bring bad and expensive real estate to the market.

Will you be part of the Bank waiting for a cycle change and the rise in the price of housing to take your stock to the market and start financing properly?

It is exaggerated to say it

It is exaggerated to say it

But in some cases this would be called misappropriation (well, Good Finance, it is not the right legal term but it serves to stage the phenomenon I explain). Instead of refinancing ex-solvent individuals (formerly good payers) and subrogating the developer’s mortgages (with rebates, it seems good to me), they turn off the tap and keep the houses.

Of course, this is not your business and you lose liquidity; But a little more trouble that gives more, “the European Central Bank will plug us cheap liquid or rescue us if the bet goes wrong,” think some senior executives hidden in their offices ?.

If it goes well, in a few years I sell houses more expensive and on top I presume extraordinary benefits before my shareholders.

Good Finance and other readers and related bloggers, is this idea a madness of Friday night fever?

Leave a Reply

Your email address will not be published. Required fields are marked *