There is much in the press over the last few days in terms of what the Spanish Government will do with the Banks and their exposure to real estate. Whilst some positive measures, that should have been implemented many months if not years ago, are now happening some fundamentals to help ease the situation are not being covered at all.
The instruction of two independent valuers to value the assets held, can only be a positive that will ensure Spanish banks are transparently owning up to the size of the problem they have, and will encourage them to more realistically price their stock.
The insistence that they clear at least 5% of their stock held will also help in pushing prices to rock bottom which is always where you have to start a recovery. Where there appears to be no concentration is on the repossession process itself which is long winded, costly and rife with activities bordering on fraud as the whole process is run by a tight knit community of people in the know with complete lack of transparency. The process helps neither the borrower nor the Bank but does help line the pockets of the auctioneers, Bank Staff and those with court links.
Even after what ultimately will almost be a closed auction, where the best was creamed off before getting to court, the Bank does not immediately get possession. Having waited possibly up to three years to get to court the Bank may then wait many months for the court to pass ownership to them.
Often the Banks themselves are left in the dark about the points in the process and have little to no rights to manage the court action effectively. Prior to this the bank has no access to the property, cannot check the situation of repair of the property and worse still incurs taxes and costs even before they can in fact market it.