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The dangers of reunifying debts

To: Does he need money?”. “Direct money. Without intermediaries”. “To: Economic problems?”. These are some of the messages with hook that are read in some announcements published in the Extremaduran press every day. Behind them there are companies of financial intermediation which product covers with stars it is the reunification and clients' debt postponement in difficulty. SPH Broker, A&M Servicredit or Credit Extremadura are some of the signatures that operate in the region and whose business has grown in the last times before the stage of widespread sobreendeudamiento of the families.

“There are the people who purifies too much”, tells Juan Pedro Cabrera, responsible for SPH Broker in Extremadura. This national company is provided with delegations in Badajoz, Caceres, Merida and Almendralejo and soon it will open also in Plasencia. Bad-tempered it makes sure that the typical case is that of a family with monthly commitments for 1.000 or 1.500 euros – included the mortgage, the car, credit cards, you buy by installments … – to which some additional circumstance presents him, as it can be the loss of the employment of one of the spouses, a costly repair of the vehicle after a traffic accident or a wedding.

Fitted already of for himself - the budget up to the limit, a circumstance of this type does that the familiar economy jumps over the airs, the non-payments and the problems come. “We do a study of every situation to reduce the monthly salaries and of 1.500 euros a month one can have left in 500 or 600, which is a number that it is possible to pay”, he tells Bad-tempered.

To pay in more years

The work of these companies centers on the debt reunification of the client, for what they come up between this one and the tens of financial institutions with which they have agreements up to finding the best solution. Logically, it is paid less a month but for more years. “Also we move forward money to the client and extract him of a possible sequestration”. If the client has patrimony (the second residence, a farm …), the company of financial intermediation can buy it to itself and bring him liquidity to go out of the hole.

Bad-tempered it makes sure that it is a problem not infrequent at all. “There are persons who do not calculate well and the labor circumstances are not those that we want, they change to worse and begin the problems”, it adds Bad-tempered. The margin of benefit of these companies is in the commission that reserves the financial institution to them.

In many cases, the persons in difficulty economic have already had some bank nonperformance, by what they appear in bad debts records like the RAI or the Asnef. This inclusion closes drastically the doors of the boxes and banks for new credits, therefore they have to resort to the companies of intermediation.

Bad-tempered he affirms that SPH Broker guarantees a “professional dealing” to the clients and advises to the families to be in difficulty that it is better to allow to advise for professionals and to recognize the problem before the situation goes to worse.

Before the widespread sobreendeudamiento of the Spanish families, also there has gone off the business of the credits express, which they offer up to quantities for 3.000 and 4.000 euros in the short space of time, although in these cases the interest is the highest. “A credit express extracts you of a trouble, but the reunification debts gives you a long-term solution”, tell sources of Finanfácil, other one of the companies of intermediation that operate in Spain. The figure of the financial intermediary is regulated from 1995 and the Spanish Bank has an official record for this type of companies.

The average mortgage of the natives of Granada increases 21 % up to 109.553 euros

20.314 are already the natives of Granada who have joined the 'club' of the mortgaged ones in the first seven months of the year. This number supposes 6,6 per cent more than of those who signed a mortgage credit in the same period of last year. The rhythm of growth of the number of mortgages makes well clear that the reiterative message that is thrown from the maximum financial authorities on one more than probable increase of the short-term interest rates does not manage to dissuade the natives of Granada from getting into debt up to maximum levels with the acquisition of a housing.

But that is not quite. Not only the number has increased of mortgaged but also it has done it, and to a much more vertiginous rhythm, the quantity of the signed capital. If last year the average mortgage of a native of Granada was about 90.607 euros, the last information offered by the National Institute of Statistics †“until the month of julio– they point that the average debt acquired to the financial institutions for the buy of a housing already promotes to 109.553 euros, 21 per cent more than in the same period of last year. In other words, every time they are more and the natives of Granada are more indebted to mortgage.

And it is not completely exact to attribute this major indebtedness to the increase of the price of the housing. According to the last information published by the society of real estate appraisal Tinsa †“regarding the first semester of año–, the square meter in the capital has got dearer 14 per cent, of what one concludes that, although for many the access to the housing is a need and not an option, the taste of the natives of Granada also is evolving towards more expensive real estate.

A quarter of point in December and other in the first trimester of 2006. In whole, the experts predict an increase of half a point in the Eurí-bor, principal index indexes to fix the interest of the mortgage loans. Of producing the upturn of the interest rates to him, the effects in the budget of the from Granada families it would allow to be evident since, for example, 96,7 per cent of the mortgages constituted in the first seven months of the year used a variable interest rate opposite to 3,3 remaining per cent of fixed type. Following the rule of the Consumers' Federation in Action (Facua) to calculate these effects on the monthly quota of the loans, for an average loan for 109.553 euros and a pay-off period of 23 years, with Eurí-bor + 0,35 per cent, the increase of the interest rates a quarter of point will get dearer the from Granada average mortgage in approximately 15 monthly euros.

But there is no fear to which this situation takes place. According to the analysis of the mortgages constituted in Granada in July, last month analyzed by the INE, the quantity of the capital of the loans overcomes the national average, a circumstance that had not happened until now. The average amount for mortgage constituted on housings is located in 125.560 euros in July, 11,3 per cent more than in the same month of 2004. In Granada, in the same month, mortgages were constituted at the price of 127.446 average euros, what supposes an increase with regard to the previous year of 40 per cent.

The provinces where the number of farms with mortgage constituted by every 100.000 inhabitants is a major sound Almeria and Toledo. On the contrary, the provinces with minor number of farms with constituted mortgage are Ourense and Lugo, and those that less cardinal they sign are Cuenca and Zamora.

Source: diariogranadahoy.com

The Euribor next to 2,5 %

The Euribor to one year, the reference most used in Spain to index-link the mortgage loans of variable type, keeps on mending positions and getting dearer the payment of the housings. In the last October, this index already raised 8,5 % with regard to the previous month (it went on from 2,22 % to 2,41 %). And this month there will take place almost with entire safety another important advance (the Spanish Bank will not confirm the fact until middle of December).

Although the variable that is used like mortgage reference is the medium month's characteristic, last Monday, the 21st, the Euribor marked 2,78 % and it has been moving from the beginning of the month over 2,6 %. Of confirming to him the increase, the mortgage market would confront an increase of the Euribor over 20 % in only two months, being located in levels of three years ago.

Notices

The change of this index means that the financial institutions of the Euro area foresee a stage with higher interest rates in one year (the Euribor is the price of the money in the interbank deals), therefore they are already adding the increases.

The proper president of the European Central Bank, Jean Claude-Trichet, allowed to make out in his last public intervention that the organism is prepared for an increase of the types, with what it will try to brake the inflationary pressures in the Euro area (the oil has raised 40 % in the last year). The increase, which would take place at the beginning of next December, would be of a quarter of point. The experts also believe that during the first trimester of the year another increase of 0,25 points might take place, placing the price of the money in 2,5 %. The levels in which there is moving the Euribor, the highest from January, 2003, move forward precisely this stage.

For Miguel Sebastián, the director of the Economic Office of the Presidency of the Government, the interest rates in Spain have already risen, because the Euribor to one year has grown more than 70 basic points in the last two months, he tells. The increase is already gathered in the Euribor. In Spain, the interest rates, if perhaps, they will go down.

In the opinion of Sebastián, there is no motive of worry of climb of the price of the money for those citizens who have a mortgage loan.

The Consumers' Federation in Action (Facua) has announced that the increase of the interest rates a quarter of point will get dearer the Spanish mortgages in an average for 19 monthly euros (for an average loan for 145.000 euros and a pay-off period of 23 years, with Euribor +0,35 %).

Inequality

If the upturn of the interest rates takes place, the effects in the budget of the Spanish families will change according to the geographical location and the level of income of the hearths. The families of the big cities would be those who would turn out to be more harmed, as aims in a study the General Association of Consumers (ASGECO), by the biggest price of the square meter that registers in these areas.

The organization denounces that you code it officials are national averages that do not reflect the problems that will happen in the most expensive areas when they raise the interest rates. The INE, thinks Asgeco, thinks that the average price of a mortgage in Spain is 134.184 euros, but while in Extremadura the average is 94.120 euros, in the Community of Madrid it is located in 188.844 euros. Asgeco denounces that the upturn of the types will harm more the residents of the most expensive autonomous regions because they will suffer major increases on having applied the new percentage and will have to increase his indebtedness.

Source: The World Housing

The first mortgages for young people in Ibiza

The lounge of plenary meetings of Consell Insular received yesterday the signature of the authorization of the first 15 Mortgages Balearic Jove del Govern of hand of the president of the maximum institution of the Pitií¼ses, Pere Palau, and the Balearic consellera d†™ Work Públiques, Transports i Habitatge, Mabel Cabrer. Until now the conselleria d†™ Work Públiques, Habitatge i Transports have sealed a whole of 139 requests, with which at present they are proceeding. Of these requests, 69 correspond with housings that are in the municipality of Eivissa, 28 in Sant Antoni, 19 in Sant Jordi and 12 in Saint Eulí laughs, between others.

In Formentera only two requests have registered to acquire a building in the island. Of 15 mortgages signed yesterday, most of the real estate are in the municipality of Eivissa (in whole seven), four in Sant Antoni, two in Saint Eulí laughs and other two in Sant Josep. Of these, seven were proceeded by the financial institution of Sa Nostra and the rest with The Caixa, according to the information offered by the conselleria. Also, all the mortgages granted yesterday in the Pitií¼ses ranged between 150.000 and 300.000 euros.

The mortgages will get dearer a little, but not so much as to come to the awesome non-payments

The European Central Bank, after numerous pressures, recommendations and suggestions of some governments and analysts of the euroarea, seems determined to finish with the price of cheap money and to raise the types a quarter of point. Although the same Trichet has hurried to remove the bogey of the waves of increases, the future will be given by the behavior of the inflation, of the growth in the euroarea and, in minor measurement, of the ups and downs of the euro.

The aftereffects of the measurement for Spain will be very negative, not neither in what concerns the consumption, nor, therefore, as for growth. More that to have disabling effects, as they are afraid of some, might help to moderate certain excesses. The mortgages will get dearer a little, but not so much how to come to the awesome non-payments. If perhaps, the involuntary familiar indebtedness, this time, will increase something.

Nevertheless, as the inflationary matters have passed between us in the last years, it does not matter that the types are a few tenths more above or further down. It is slightly probable that the measurement helps to moderate the Index of Prices, which in case of Spain is in 3,5 %, and one can place at the end of year close to 4 %, a double increase that foreseen for the euroarea, owed especially to lacks, improvidences and proper mistakes.

True it is that slowly we approach at the end of a long stage of strong expansion, with a soft deceleration of the internal consumption. For next year – without additional helps by types increase - it a descent of some tenths is foreseen in the increase of the GDP. It is already noticed by several industrial sectors, which for some time lose market share because of the international competition.

Source: laverdad.es

The incentives will grow to the inverse mortgages

The fiscal support to the called inverse mortgages for the real estate of the biggest persons they might be regulated across the project of law of reform of the IRPF, announced today CIU in the plenary meeting after coming to an agreement with the socialistic group.

By virtue of this agreement, CIU withdrew today his law proposition to encourage fiscally the ‘inverse mortgage’, a financial product for which a major person can ask for a credit to a bank, in the shape of monthly revenue, and put like guarantee the house of which it is proprietary, without resigning from his property.

Normally, the expiration of the credit links to the death of the debtor, moment in which the heirs of the causer can choose to reimburse the ready credit, supporting therefore the property, or sell the building, materializing and preserving in every case the corresponding appreciation.

After the reached agreement, CIU and Spanish socialist party have registered a proposition not of law that it urges the Government to introduce in the next reform of the IRPF and of a complementary way to the approval of the law of Dependency, ‘a favorable fiscal treatment of the acts and juridical business faced to facilitate the mobility and liquidity of the patrimony of the physical persons’.

The target, he adds the joint initiative, is to contribute to the coverage of the needs derived from the problems of dependency and aging.

CIU announced that it was withdrawing his law proposition in the plenary meeting of the Congress, where this evening his admission had to be voted for step, after explaining the content of the same one and defending his virtues.

Later, the spokesmen of both groups, Alfredo Pérez Rubalcaba y Josep Antoni Duran i Lleida, appeared before the means to be congratulated on this agreement of ‘last hour’.

According to Pérez Rubalcaba, it has gone over to this agreement because there is a ‘substantial coincidence of targets’, but that must be contemplated in ‘the special instruments’, and it predicted an unanimous support of the whole Chamber.

Durán i Lleida pointed out that the CIU initiative took as a principal target to assist the economic needs for the old age and the dependency and justified the agreement with the Socialists because, in politics, ‘the most guessed right thing is to obtain the efficacy of the most suitable instruments’.

In the explanatory preamble of the initiative today retired, CIU was making clear in his text that the Spanish financial institutions have already begun putting at the disposal of his clients this ‘inverse mortgage’ that, in contrast to other financial instruments, like the life ones, allows, in addition to giving liquidity to the real estate patrimony, supporting the property of the building and materializing the revaluation of the building.

It was pointing out also that opposite to these potential advantages, it is necessary to say that the current fiscal legislation penalizes this figure, therefore, in practice, his use is scarce and was emphasizing that cake of an attractive formula for the owner, since it allows to support the entitlement of the building, having a few revenues with which to complement the obtained ones by other sources.

Sources: Terra Actuality and EFE

The mortgages níºmero grows 21 per cent in Seville in spite of the high prices of the apartments

The analysts predict that the real estate bubble is on the point of exploiting and that the market cannot already absorb the housings quantity that every year goes on sale, the facts say the opposite. The number of mortgages in Seville keeps on growing exponentially, as the capital big enough for the acquisition of every housing. In fact, from January until June, 2005 a whole of 26.362 housings was mortgaged in the province of Seville, 21 % more than in the same period of 2004, according to the National Institute of Statistics (INE). And it although Andalusia is the autonomous region with the most expensive mortgage types, according to the School of Registrars.

The mortgage debt fixes a record and comes closer 450.000 million euros

The indebtedness of the Spanish families for the housing acquisition supports his high advance rhythm, after there is noted down an increase of 24,4 % until September, what supposes an acceleration of something more about half a point with regard to the rise registered in the same period of the previous year, according to the last information of the Spanish Bank. The entire indebtedness of the hearths, on having added to the mortgages the credit to the consumption, raised 20,6 %, while the saving continues in historical minimums. This situation supposes that the vulnerability of the families increases before one more than probable interest rates rise.

In the first nine months of the year, the loans granted by the resident credit companies to the hearths for the buy of housing reached 447.953 million euros, what represents an increase of 24,4 % with regard to the same period of 2004 and a light acceleration of three tenths opposite to January. The increase of the indebtedness for the housing buy is a consequence of the increase of the price of the real estate, which has forced the families to request credits of major quantity to be able to pay them.

This is confirmed on having seen that the average amount of the mortgages until July, last fact published by the INE, grew 13,7 % with regard to the same month of the previous year, up to being located in 138.184 euros. In addition to the loans for the housing buy, the financial institutions granted to the Spanish hearths 168.789 million euros in credits to the consumption until September, what supposes an increase of 11,4 % with regard to the same period of the previous year. The increase of the credit to the consumption is supported concerning this valuation from November, 2004.

Adding both classes of loans, the entire credit got for the families reached in the first nine months of the year 616.700 million euros, 20,6 % more than in the same period of 2004, what supposes an acceleration of three tenths opposite to the growth of 20,3 % registered during the previous year.

Of the whole of the increase of 20,6 % of the financial debt of the families until September, 17,2 % owed to the growth of the mortgage ones (16,3 % in the set of 2004) and 3,4 % remaining, on the credits to the consumption (equal valuation in 2004), what demonstrates that the relative weight of the mortgages grows on the whole of the debt of the hearths and that of the credits is supported to the consumption.

Source: laopinioncoruna.com

Euribor to 2,414 %

The strong October upturn, confirmee this Wednesday for the Spanish Bank, left to the Euribor almost a tenth over the level of twelve months ago, when this indicator was located in 2,316 %.

The increase registered in October not only is the biggest from 2003, but also it has led to the Euribor at the highest level of last two years and a half, because the market has become convinced of that in the next twelve months will raise the official interest rates between 0,25 and 0,5 points and will be located between 2,25 and 2,50 %. With the strong movement registered in October, when the European Central Bank (BCE) began warning that it considers to raise the types, the mortgage indicator breaks also a gust of soft swaying, which were supporting him between 2,10 and 2,35 % from middle of last year.

The consulted experts warned this Wednesday of which the increase registered in October goes way of there being overcome in November, since in what goes of month, this indicator has raised more than two tenths and has fixed his average in 2,64 %, a level that was not touching from February, 2003. The definitive increase might be major, since in the last days it registered the biggest increases and went so far as to be located in the annual maximum of 2,703 %.

This increase would mean that the experts are deducting a major types increase, that is to say, that in the next twelve months the BCE would raise them up to 2,75 %. The analysts argue that the European economies are recovering - last Tuesday it was known that the Euro area advances to a rhythm of 1,5 % opposite to 1,1 % of three months ago - and, also, the inflation is repuntando, what propitiates a next increase of the price of the money.

These factors, according to the market, are it sufficiently important like so that they avoid neither the increase of types nor the situation of political suspense nor the high oil price, circumstances that until the last September were occupying first place to delay a types increase. That's why, only two months ago the Euribor was located in 2,219 % and now it approaches quickly up to 2,7 %.

The Spanish Bank also reported this Wednesday that the Mibor, the indicator of reference to the loans signed before 2000, promoted 0,192 points, up to 2,415 %, while the active type of reference of the savings banks was supported in 4,5 %. In October, the average type of the mortgage loans to more than three years granted by the set of the credit companies grew 0,028 points up to 3,225 % after the applied one by the banks was increasing 3,125 % and that of the boxes, to 3,292 %.

For his part, the internal yield on the secondary market of the public debt between two and six years lowered 0,007 points and it was located in 2,518 %.

Source: Agency EFE

Debt reunification

Interview realized to governing Sergio Solí-s of capital expansion Credit route The provinces digitalis.

To: Why has the product received so much interest of reunifying debts at present?
The consumption habits have changed in the last years. The indebtedness level is to the limit. It does not wonder to see young people of less than 20 years with Audi A3, for example. Also, it is practically sure that the familiar indebtedness is going to keep on growing, because in our society it is every more difficult day to resign to nothing, good houses, good cars, good meals, good vacaciones†¦ With this conjuncture, it is logical that if today you pay 1.300 euros a month and there exists an alternative that allows you to reduce the quota up to 500 euros / month, the latter option receives interest. The intermediaries we have looked for solutions as this one to approach the demand of the street.

To: To what families can it turn out to be interesting to unify debts?
The debt reunification will turn out to be interesting to all those families that need liquidity, which troubles spend to pay the different quotas of his loans or even for those who have stopped paying and who have sequestrations or an imminent auction.

To: What advantages does the debt unification present?
The advantages are different: the client can reunify all his loans in one, can have also extra money paying a lower quota, can be saved from a situation of imminent auction, etc.

To: What are the disadvantages?
Perhaps that gets longer the term of the payment, but it is avoided to resign from several things, as for example to obtain money for the wedding of a son, to do reforms in the hearth …

To: What future do they foresee for the debt reunification product?
I am sure that it will be on the increase, since we tend to the product it begins to be consolidated. The people begin to understand our work. A few years ago, when we were explaining what we were doing nobody understood our work. Now, many people have a friend or a neighbor who has done a reunification.

To: What commissions is it necessary to pay for his work like intermediaries?
It depends on the type of operation and on his complication. The commission ranges between a 1 % and 5 %. The same is not an operation with sequestrations, that a reunification for a client with a mortgage who only finances 60 % of the building and who is provided with all the payments a day.

Source: The provinces digitalis

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