A great many of our clients have bought bank repossessions through CAM bank in Spain. The bank is now up for sale and we will try and answer some of the questions that are likely to arise.
Who will buy CAM?
A number of banks have been mentioned but whoever it is will be a far stronger entity than the current CAM bank. Sabadell is one of the banks largely tipped to acquire CAM. Santander, Barclays and BBVA have also been mentioned.
Is this similar to the UK bank bailouts?
Yes, and Ireland too. The UK government bailed out Royal Bank of Scotland, Lloyds and Northern Rock however the difference with CAM and the Spanish government is that they seem keen to sell the bank on quickly. This probably has more to do with size. CAM bank is far smaller than the UK entities and easier to move on to a larger bank who can afford to buy it.
Will CAM honour current mortgage terms?
If you have an existing mortgage then you have a contract and any new owner will have to take on the existing mortgages. You will then be a mortgage customer of that bank.
Will cam honour current mortgage offers and prices?
If you have a formal mortgage offer then yes. If you are in the process of obtaining a mortgage then we are told that nothing will change in the banks operations until after it is sold. Hence the current CAM policy and mortgage offerings should continue on the same terms.
What will happen to future prices?
CAM is selling property fast currently in some big promotions in order to clear the decks prior to the sale. CAM is already undercutting other Spanish banks on property prices in particular on the Polaris World resorts where we operate and other locations in Murcia such as Peraleja resort. We certainly don’t see prices going down with the new entity but we fear we may see the last of the half price bargains such as Hacienda Riquelme or the €65,000 offer at Condado de Alhama as the bank adjusts to a less desperate situation under new owners.
What will happen to future mortgage offers?
CAM has been offering very favourable mortgage terms on property bought from the bank especially to overseas buyers who are offered 90% mortgages (for OECD countries) at favourable interest rates. Again, we may see the terms becoming less favourable in future. None of the likely buyers offer such favourable terms. However at this point and until the bank is sold and policy is changed, overseas buyers can still get 90%mortgages.