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In uncertain economic times, many people find themselves unable to make their mortgage payments. Whether the mortgage is on a primary residence or vacation home, defaulting on a mortgage can have serious consequences for the homeowner. These consequences vary by state, province, and country, so you must be sure to completely understand them.

Defaulting on Spanish mortgages, for example, has very specific consequences. In past years, it was possible to default on a Spanish mortgage with little to no loss at all to the homeowner. This was especially true if the homeowner was not a Spanish citizen and the home was a vacation home or second residence. However, this is no longer the case, as Spanish banks can and will pursue non-residents to fulfill their mortgage obligations.

If you find yourself unable to avoid defaulting on your Spanish mortgage, the bank may agree to take the home back. This simple option will save the homeowner a lot of money in court costs and additional interest on the home loan. However, turning the home over to the bank is a process that must be negotiated. The bank has to accept your offer, and they are under no obligation to do so. The bank is more likely to accept the home back from you if you have had a true hardship that has affected your ability to make payments on your Spanish mortgage. Any homeowners that can prove such a hardship to the bank will be even more likely to succeed in negotiating a turnover.

If despite your attempts to negotiate a home turnover, the bank refuses your offer, you must then sell your home. The homeowner must sell the home for as much as possible, as the bank that holds the Spanish mortgage will come after him or her for any amount remaining on the loan after the home sale proceeds are paid to the bank. They are more likely to do so if the shortfall is large. However, the bank can legally pursue the homeowner for any shortfall amount at all. The bank may collect money by placing liens on any and all assets of the homeowner..

Defaulting on a Spanish mortgage is an extremely serious situation, so it is essential that the homeowner work as closely as possible with the bank as soon as it is evident that defaulting is going to be unavoidable. Doing so can result in an agreement that will satisfy the bank, relieve you of your responsibilities associated with the Spanish mortgage, and allow you to keep other assets you may own.