However some states, and many other countries, have recourse mortgages. Here's what happens when you take out a recourse loan and try to walk away: the bank can haunt you until your dying days, and maybe even seize assets you have in another country!
A SPANISH bank may be able to seize a house in Britain after the owners – a family of four – missed mortgage payments on their apartment in Spain. Banco de Sabadell in Marbella has used a European Enforcement Order (EEO) to take control of the couple’s 300,000 pound (€358,391) three-bedroom cottage near Chippenham in Wiltshire.
They may even be forced to sell the cottage in order to pay back the mortgage on the property they bought in Duquesa in 2004. The mortgage they took out on the Spanish property was 145,000 pounds (€173,171). They offered to give the apartment to the bank when repayments became difficult last year, but Banco de Sabadell apparently refused.
Instead they launched a bid to seize the couple’s home. Ian and Carol Chatterton, both NHS paramedics, have two daughters aged 12 and 14 and have lived in their cottage for 20 years.
An interim was posted to them by a county court in October, but if they want to appeal against the order, they must do so in a Spanish court; which they cannot afford to do.
“We’re devastated,” Carols, aged 48, told the Daily Mail.
“There are thousands more Britons in our position. This is a time bomb waiting to go off. I can see the suicide rate going up as a result. It will have massive repercussions.”
The mortgage on the cottage, which is 250,000 pounds (€298,450), is held by Halifax, who has agreed to the forced sale provided it got its money back.
The remainder would be taken by Banco de Sabadell.
Don't EVER take out a recourse mortgage!