The bad bank in Spain known as SAREB has shown its true nature and why we will be staying well clear of having any business relationship with the bank.
We see the problems on the ground with buyers at La Duquesa Village and Bahia de Plata from Caixa Catalunya experiencing horrendous problems with those banks now being nationalized not having there agreed obligations to finance the said purchases honored by SAREB. This means that 100s of Spanish house sales representing millions of Euros of house sale in effect being cancelled. This is the same situation with the banks that have been nationalized holding stock in the Medina de Banus development.
It’s really hard enough to find would be Spanish property buyers in this market without SAREB having no comprehension about selling to the international property buyer. We alluded to the problems the bank would have last month and unfortunately it’s actually worse than we predicted.
The bad bank, created as a condition of a European bailout of as much as 100 billion euros for Spain’s banking industry, will have 90,000 homes within about two years, Sareb General Director Antonio Carrascosa said on Nov. 27. The Bankia group alone will transfer 38 billion euros in real estate loans and 12 billion euros of foreclosed assets by gross value to the bad bank.
Sareb will buy foreclosed assets at an average discount of 63 percent to book value. That includes reductions of as much as 80 percent for foreclosed land, 63 percent for foreclosed unfinished housing developments and 32 percent for loans to finance finished apartments, according to the state rescue fund known as FROB.
However we come back to the same old problem if the bank doesn’t know how to deal with International property buyers how are they going to shift the stock no matter what the price is. 2013 should be a very interesting time to say the least.
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