Expats in Spain battle for homes

Posted on 14 Mar at 6 PM in Spain UK
Story link: Expats in Spain battle for homes
Expats in Spain battle for homes

Expats in Spain battle for homes

As reported by This Is Money, expats in Spain are battling to save their homes after losing their life savings to an Icelandic bank's equity release programme. Hundreds of forgotten UK victims of failed bank Landsbanki are now on the verge of having their properties foreclosed after a legal battle of four years.

Many victims are retired expatriates living in Spain, and most are involved in a final court battle to stop their homes from being repossessed by the bank liquidators. Landsbanki collapsed in 2008, but the pensioners still owe thousands of pounds on an equity release programme run by the bank and sold via unscrupulous financial advisers.

The Luxembourg-based liquidators from the bank say they will use this money to pay back other creditors. However, the pensioners, most of whom are retired in the Costa del Sol, say they were deceived and therefore should not pay.

Many of the victims are trapped with homes which have plummeted in value, watching their dream retirement ridden with debts and costly legal fees. Among these are 63-year-old Henry and Carolyn Bowen, who live near Malaga.

The couple signed up for equity release investments in 2006 via a British financial adviser who worked in Marbella. They were told that the scheme would let them cut their inheritance tax fees under Spanish law and also help pay for Mrs Bowen’s breast cancer treatment.

They decided to take £300,000 from their country villa, investing £278,000 of it in a fund managed by Landsbanki. However, when Landsbanki collapsed, the couple was left unable to re-pay the 6.5% interest on the equity release loan.

The money from the fund was thus frozen, and since then, liquidators have been taking £280,351 from this fund to pay off much of the borrowing. The interest rate on the remaining debt was hiked, and it has now spiralled as high as £175,236 with interest and charges.

Mrs Bowen, who is a retired headteacher, lamented that it seemed like a never-ending “nightmare”. She added that if she has to give up her home, she and her husband would be left homeless.


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