This article is written by solicitors...it is in their business interest to advocate this line. I'd check out the non-recourse mortgage before I wouldstart crying!
I've found all my legal documents but can't find much about 'sans recours' but I don't suppose it will be that obvious?! Unfortunately, my basic french is not enough to understand the contracts in full.
I had another call from my bank yesterday; they seem more desperate than me to resolve the situation and have offered a very reasonable solution but my biggest fear is that the management company I am with will run in to trouble again and i will be back to square 1. I tried asking him what happens if I don't pay. He said the apartment will be auctioned and they will come up with a payment plan for the balance. His English wasn't as good as the girl I had been previously speaking to so I have been trying to phone her today.
Another worry is that if I do not take their olive branch, I will not have a leg to stand on when it comes to foreclosure time. I still find it very difficult to believe the French deal in non-recourse mortgages; they are far too clever for that I suspect.
Hi, have read with interest and am in the same boat.
It appears information on banks and their default criteria vary as differently as their lending criteria. I guess it depends how big a bully they are.
My leaseback apartment is worthless and a lawyer told me that it is straight forward for banks ( especially international banks beginning with B for bully)to seize assetts in the home country. I am just not sure whether communication is key or silencio.
Details from the leaseback section of the aforementioned website:
Since
the Nineties, when interest rates were last extremely high, the French
mortgage market has been based on long term mortgage deals which offer a
degree of protection for the borrower. It is quite common for a French
resident to fix their mortgage payments for 20 years and to see that
loan through to the end without ever remortgaging. In France, any
variable rate mortgage offers the flexibility to increase the term of
the mortgage to bring down payments, with many banks capping the amount
of the increase in monthly payments to the rate of inflation.
Only in exceptional cases will French banks allow borrowers to take
on a mortgage payment which would increase the amount spent on a monthly
basis, to service all their payments for borrowings past 33% of gross
income. This leaves borrowers with sufficient income to spend, and the
fact that mortgages are either capped or fixed means that the banks are
confident borrowers will not default.
The stability that this responsible lending brings means that 100%
loan-to-value is still achievable from a range of banks, for both
residents of France and non-residents, though other lending criteria may
apply (such as making loans only available to homeowners or those with a
certain level of savings, with minimum income criteria also prevalent).
The bank will take a charge on the prospective property the details of
which will be outlined in the loan offer. The loan will generally be a
non-recourse loan - meaning that in case of default the bank will only
take the property as security and not pursue payment of the debt from
other assets. This is one of the reasons the banks are so strict when
asking for evidence of income and assets.
Got on to that website; interesting reading but I find it hard to believe the French offer non-recourse loans; this article seems to be the only one that lends itself to that idea. Google shows up pages of US states where non-recourse is written in to their law.
I am going to trawl through my legal documents from the early days to see if I can find anything.
Irony at its best..... I got a call from my French bank this morning after 12 months of me trying to get them to reply to me! They have hired an English speaking lady (very nice) to try sort out the mortgages in difficulty. So I am very much torn now. I'm ten months in debt but they are fairly determined to find a solution; even offering to re-mortgage over a longer term. They seem to be as desperate as me! They've upset an already depressing Monday!
I too am defaulting on my leaseback morgage that I have with Credit Immobilier and my French bank account is with Societe Generale.
Im hoping for some updates as to how your situations have advanced. There hasn't been any posts for quite some time. Have your properties been sold at auction? Have thd have the fench banks tried to claim the money back from you in the UK?
I really can't take anymore sleeplessnights over this whole nightmare
I am also in the same situation my mortgage is with SG. I have heard nothing for many years and my rent has been siezed with the banks obtaining a court order for reposession.
This week I have just started to receive papers from the again. I had heard that during the dgccrf investigation no action was able to be taken.
I'm also keeping an eye on these posts to see what happens.
I defaulted on my mortagae and the bank SG took the rent over. I had a letter sent to me via a court in England saying I had 8 days to pay £33k as it was the repayments I had missed plus interest. I spoke to the bank and explained I could not afford it and I was putting it up for sale via PV.
Around 16/17 months ago I had an offer on the cottage but after the comission PV would take as I used them to sell it there was over a £100k difference so the bak said know. After agreeing to add some money they would allow the sale to go through.
This was June time last year. In April I heard the bank had passed the debt over to a compnay called EOS. As long as the sale went through the agreement would stand, if the sale did not go through then the whole debt would be what I owen EOS. On their website they have offices through europe.
We finally signed end of September. I had to email the notary I used, PV put me in touch with them, the contact at PV and the bank then EOS all the time. I would email 3/4 times a week sometimes a few times a day. The conatct at PV was great and very reassuring. The lady at EOS was also great.
There is a high chance that they would never of come after me but I was in a position to make a deal and I wanted to try and put it to bed once and for all.
I always translated the emails into french and I found early on they were quicker coming back to me. I would email people sometimes 6 times a week with no reply for months.
I don't know if anyone else has had the same expierence but as I have now gone through it I wanted to say what happened.
If anyone has a leaseback mortgage with Credit Immobilier de France (CIF) there is a group of English & Irish owners who are instructing a solicitor to see if an outcome can be reached with CIF to close this debacle of an investment once and for all. We are all with P&V Center Parcs, but if you want to be involved message me at +447963772727 and I will see if the group are happy to add you into the class action - but my view is the more of us involved the greater our chances of success.
If one defaults on loan or mortgage repayments, lenders will normally issue repossession proceedings and get the mortgaged (leaseback) property sold at public auction.
Regrettably, French mortgages are not non-recourse. In other words, where a leaseback property is in negative equity, lenders in France can further pursue borrowers, for payment of the balance that can remain after the property has been auctioned.
In my experience, when French leaseback properties get auctioned/repossessed by French lenders, these rarely try and enforce payment of the shortfall against borrowers established overseas.
Borrowers who find themselves in the above-mentioned tricky, nonsense situation can expect to receive numerous reminders and bailiffs' Notices from France. In some cases, the French lender sells its claim to a recovery agent which then continues pestering overseas-based borrowers for payment.
In practice however, few French lenders - if any - go to the extent of carrying out actual realisation steps against overseas-based borrowers' assets. This applies to leaseback owners living in other EU Countries and beyond.
EC Regulations facilitate the mutual recognition of other Member-States' Court Orders. So, in principle, a French lender could try and enforce re-payment obligations against a borrower's assets and income in Ireland. But again, I haven't seen this happen so far. I understand that, due to litigation costs, lenders in France tend to consider that such realisation steps make the whole process uneconomical. Besides, borrowers' homes in Ireland may already be mortgaged. French lenders are aware that, if successful in having the property in Ireland sold, there may be little left to them since their claim is not a preferential one, so could rank second or third...
Since Brexit, it has become even harder for lenders in France to pursue UK-based borrowers. The article I recently wrote on the subject might be of interest to this forum's British members who were mis-sold French Leaseback properties and are now enduring the foreclosure threat nightmare.
Apologies for posting on an old thread but it's very relevant for me. I have been following this forum for some years but now at crisis point.
Trying to keep this short - I was approached with this investment in 2008. Same old story - 11 year agreement, guaranteed rent, security because the banks only lend where they're confident in the valuations, French government backed, no additional costs, totally secure, hands off etc. It came packaged with mortgage, valuation and notary. At the time my husband had been too ill to work for 6 years, apart from doing bits of work for me. I had just become ill and knew I would have issues as sole earner for us and our young daughter going forward, and this seemed a no brainer (haha). I'm self-employed, if I couldn't work we didn't eat. We had no savings, up front fees came from mortgage against my own house. We were quite open about all this.
Fast forward to last summer, after years of reducing rents, non-payment of rent, unexpected costs, management company changes, management company walking away, I got sick of trying to stop the thing being repossessed and stopped propping up the mortgage. The money in the French bank account ran out (I have never taken any money out of this, only ever put money in).
I've just got the letter from the bank telling me that my husband and I need to appear in court in Beziers on 17th December or the apartment will be sold for 25,000 euros. The purchase price was 119,000 euros. They've added on missed payments, interest and nearly nine thousand euros worth of compensation to bring this up to 135,000. They also wish to add interest at 6.22% from last summer, this is just listed as "BRIEF" (??) They're nothing if not cheeky.
I'm not well enough to get to Beziers right now and I don't have a French lawyer (in Beziers or otherwise) but I do not want to let them just repossess unchallenged. Not because I want the property - I really don't! - but because I have read that enforcing a claim in the UK may be easier if the judgement is uncontested? And really because I don't want them to feel they can just get away with this.
I've followed the results from DGCCRF and their feedback to CCPC that three developments (not ours, but it must set a precedent?) might be liable to criminal proceedings if people brought legal cases. I maintain that fraud and misselling took place - surely the selling agents, developers, banks and notaries must all have been aware? Rent on so many of these developments has gone down after the first several years, it cannot be coincidental.
My main concern is obviously to protect my house in the UK, even if it's unlikely that they will go after it. I still don't have any other big assets for them to go after, after 16 years of having to take time out for ill health. I don't know if I can submit something to the court in writing - has anyone done this? It would unfortunately need to be in English.
I would also like to know if anyone who went through this process ever did get pursued in the UK or Ireland?
Yes we are being chased for mortgage default from 15 years ago. Coming in to Irish courts it would appear. I think we will try and fight it, has anyone attempted?? We had one of the properties in one of the 3 complexes that were part of the investigation.
I have but from France. I believe the process is easier and quicker if you are out of the country and it's not your main
/only residence. Going after you in Ireland is another matter. You may have a case for fraud, breach of contract etc but this may mean a costly legal battle. Are there others who could join?
English
Français
thanks for that,
they could try,but i imagine they would find it difficult,
just like if the banks here try to go after the poles and other non nationals who caught them here
My understanding is that a French bank can pursue you in Ireland or the UK.
hi all
very difficult to get a straight answer from anybody on the default option,developers here in ireland seem to be very good at it,
i would find it hard to believe that they could come after you here,
they will have the property and they can sell that eventually,
they gave you the money and circumstances changed so tough luck on the bank,
there must be lots of people out there who have walked away at this stage,
westside40841.8055787037hi
i was thinking of doing the same,as far as i know they cannot come after you outside of france,
i am in ireland as well,
i would think there is a lot of people in the same boat,
i have 3 places in france,2 great one a disaster,
nemea are the man co of the good ones,never a problem with them
would like to meet up if there is any interest with other people in ireland to help with any issues,
friend speaks french
westside40828.0058333333This article is written by solicitors...it is in their business interest to advocate this line. I'd check out the non-recourse mortgage before I wouldstart crying!
Hi All,
I've found all my legal documents but can't find much about 'sans recours' but I don't suppose it will be that obvious?! Unfortunately, my basic french is not enough to understand the contracts in full.
I had another call from my bank yesterday; they seem more desperate than me to resolve the situation and have offered a very reasonable solution but my biggest fear is that the management company I am with will run in to trouble again and i will be back to square 1. I tried asking him what happens if I don't pay. He said the apartment will be auctioned and they will come up with a payment plan for the balance. His English wasn't as good as the girl I had been previously speaking to so I have been trying to phone her today.
Another worry is that if I do not take their olive branch, I will not have a leg to stand on when it comes to foreclosure time. I still find it very difficult to believe the French deal in non-recourse mortgages; they are far too clever for that I suspect.
pinkdogfan40975.4255902778I have a French SG mortgage & it states under the heading of:
‘Borrower Commitments and Loan Guarantess’
Security guarantees witnessed by notarial instrument:
• 1st level mortgage to the amount of 123 456 euros on the property
purchased
Costs of set-up of security guarantees
• 3 325.36 euros
Does anyone know if this is relevant?
Has anyone taken any legal advice regarding French mortgage default &
general process?
They cannot seize assets if your mortgage in non-recourse.
Hi, have read with interest and am in the same boat.
It appears information on banks and their default criteria vary as differently as their lending criteria. I guess it depends how big a bully they are.
My leaseback apartment is worthless and a lawyer told me that it is straight forward for banks ( especially international banks beginning with B for bully)to seize assetts in the home country. I am just not sure whether communication is key or silencio.
Sorry, am not very positive.
Tri
Hi Westside, it looks like I have the same mortgage as you, have you
defaulted & if so what has happened?
Also, are you saying that you have 1 more to sell or that you are giving 1
back to SG & will take your chances?
I'm with Credit Immobilier de France. I've already had interest only. I'll be trawling the docs tonight to see if there's any mention of non-recourse!
with societe generale,on a capped rate,no degree of optuins with this,
no contribution holiday or skip in payments,no interest only,
i have one other place there to sell and then i will leave this place to them and take mt chances,
keep in touch everbody as its great to read the different views,
Thanks JuanAzur; fingers & toes crossed - I am going to check my documentation tonight!
Details from the leaseback section of the aforementioned website:
Since
the Nineties, when interest rates were last extremely high, the French
mortgage market has been based on long term mortgage deals which offer a
degree of protection for the borrower. It is quite common for a French
resident to fix their mortgage payments for 20 years and to see that
loan through to the end without ever remortgaging. In France, any
variable rate mortgage offers the flexibility to increase the term of
the mortgage to bring down payments, with many banks capping the amount
of the increase in monthly payments to the rate of inflation.
Only in exceptional cases will French banks allow borrowers to take
on a mortgage payment which would increase the amount spent on a monthly
basis, to service all their payments for borrowings past 33% of gross
income. This leaves borrowers with sufficient income to spend, and the
fact that mortgages are either capped or fixed means that the banks are
confident borrowers will not default.
The stability that this responsible lending brings means that 100%
loan-to-value is still achievable from a range of banks, for both
residents of France and non-residents, though other lending criteria may
apply (such as making loans only available to homeowners or those with a
certain level of savings, with minimum income criteria also prevalent).
The bank will take a charge on the prospective property the details of
which will be outlined in the loan offer. The loan will generally be a
non-recourse loan - meaning that in case of default the bank will only
take the property as security and not pursue payment of the debt from
other assets. This is one of the reasons the banks are so strict when
asking for evidence of income and assets.
It is working for me try this again
http://www.athenamortgages.com/French_Mortgage/Second_Home_M ortgage_Guide.php
If not then try
http://www.athenamortgages.com/
Then click on the 'mortgage guide' tab and then on the 'second homes' tab
Got on to that website; interesting reading but I find it hard to believe the French offer non-recourse loans; this article seems to be the only one that lends itself to that idea. Google shows up pages of US states where non-recourse is written in to their law.
I am going to trawl through my legal documents from the early days to see if I can find anything.
Hiya,
That URL wouldn't work:-(
Irony at its best..... I got a call from my French bank this morning after 12 months of me trying to get them to reply to me! They have hired an English speaking lady (very nice) to try sort out the mortgages in difficulty. So I am very much torn now. I'm ten months in debt but they are fairly determined to find a solution; even offering to re-mortgage over a longer term. They seem to be as desperate as me! They've upset an already depressing Monday!
Back to the drawing board..........
Have a look at the last paragraph on the following web page:
http://www.athenamortgages.com/French_Mortgage/Second_Home_M ortgage_Guide.php
I never came across this term before; I certainly hope that is the case! However, this article paints a very different picture
http://www.frenchentree.com/french-law/DisplayArticle.asp?ID =45904
Interesting, I will also be checking my docs. Out of interest, I am with Societe
Generale, which banks are you guys with?
Hi everyone
I too am defaulting on my leaseback morgage that I have with Credit Immobilier and my French bank account is with Societe Generale.
Im hoping for some updates as to how your situations have advanced. There hasn't been any posts for quite some time. Have your properties been sold at auction? Have thd have the fench banks tried to claim the money back from you in the UK?
I really can't take anymore sleeplessnights over this whole nightmare
many thanks
UK-france
Your last post suggested you were going to default on your mortgage. I am with the same bank and mortgage company and I am thinking of doing the same.
Have you defaulted and what has happened if you have?
many thanks
This thread has four years of people worried about what happens when they default but no resolution one way or another.
Did anybody actually default? If so, what were the consequences?
Walked away nearly 5 years now ,
property still my name ,owe them 87 k plus interest and penalties which is up to 113000 now I think ,property worth who knows 60 k
never heard a word from them since I stopped paying mortgage ,
waiting for them to come after me ,should be fun considering I only speak Irish ,
Hello,
I am also in the same situation my mortgage is with SG. I have heard nothing for many years and my rent has been siezed with the banks obtaining a court order for reposession.
This week I have just started to receive papers from the again. I had heard that during the dgccrf investigation no action was able to be taken.
I'm also keeping an eye on these posts to see what happens.
Thanks to all for updates,
important to keep all informed ,
slainte
I last posted in August 2015.
I defaulted on my mortagae and the bank SG took the rent over. I had a letter sent to me via a court in England saying I had 8 days to pay £33k as it was the repayments I had missed plus interest. I spoke to the bank and explained I could not afford it and I was putting it up for sale via PV.
Around 16/17 months ago I had an offer on the cottage but after the comission PV would take as I used them to sell it there was over a £100k difference so the bak said know. After agreeing to add some money they would allow the sale to go through.
This was June time last year. In April I heard the bank had passed the debt over to a compnay called EOS. As long as the sale went through the agreement would stand, if the sale did not go through then the whole debt would be what I owen EOS. On their website they have offices through europe.
We finally signed end of September. I had to email the notary I used, PV put me in touch with them, the contact at PV and the bank then EOS all the time. I would email 3/4 times a week sometimes a few times a day. The conatct at PV was great and very reassuring. The lady at EOS was also great.
There is a high chance that they would never of come after me but I was in a position to make a deal and I wanted to try and put it to bed once and for all.
I always translated the emails into french and I found early on they were quicker coming back to me. I would email people sometimes 6 times a week with no reply for months.
I don't know if anyone else has had the same expierence but as I have now gone through it I wanted to say what happened.
If anyone has a leaseback mortgage with Credit Immobilier de France (CIF) there is a group of English & Irish owners who are instructing a solicitor to see if an outcome can be reached with CIF to close this debacle of an investment once and for all. We are all with P&V Center Parcs, but if you want to be involved message me at +447963772727 and I will see if the group are happy to add you into the class action - but my view is the more of us involved the greater our chances of success.
hi Julian163,
can you give us feedback on how your case is progressing so far?
thanks
If one defaults on loan or mortgage repayments, lenders will normally issue repossession proceedings and get the mortgaged (leaseback) property sold at public auction.
Regrettably, French mortgages are not non-recourse. In other words, where a leaseback property is in negative equity, lenders in France can further pursue borrowers, for payment of the balance that can remain after the property has been auctioned.
In my experience, when French leaseback properties get auctioned/repossessed by French lenders, these rarely try and enforce payment of the shortfall against borrowers established overseas.
Borrowers who find themselves in the above-mentioned tricky, nonsense situation can expect to receive numerous reminders and bailiffs' Notices from France. In some cases, the French lender sells its claim to a recovery agent which then continues pestering overseas-based borrowers for payment.
In practice however, few French lenders - if any - go to the extent of carrying out actual realisation steps against overseas-based borrowers' assets. This applies to leaseback owners living in other EU Countries and beyond.
EC Regulations facilitate the mutual recognition of other Member-States' Court Orders. So, in principle, a French lender could try and enforce re-payment obligations against a borrower's assets and income in Ireland. But again, I haven't seen this happen so far. I understand that, due to litigation costs, lenders in France tend to consider that such realisation steps make the whole process uneconomical. Besides, borrowers' homes in Ireland may already be mortgaged. French lenders are aware that, if successful in having the property in Ireland sold, there may be little left to them since their claim is not a preferential one, so could rank second or third...
Since Brexit, it has become even harder for lenders in France to pursue UK-based borrowers. The article I recently wrote on the subject might be of interest to this forum's British members who were mis-sold French Leaseback properties and are now enduring the foreclosure threat nightmare.
Your article was very helpful Cordiez, thank you.
Apologies for posting on an old thread but it's very relevant for me. I have been following this forum for some years but now at crisis point.
Trying to keep this short - I was approached with this investment in 2008. Same old story - 11 year agreement, guaranteed rent, security because the banks only lend where they're confident in the valuations, French government backed, no additional costs, totally secure, hands off etc. It came packaged with mortgage, valuation and notary. At the time my husband had been too ill to work for 6 years, apart from doing bits of work for me. I had just become ill and knew I would have issues as sole earner for us and our young daughter going forward, and this seemed a no brainer (haha). I'm self-employed, if I couldn't work we didn't eat. We had no savings, up front fees came from mortgage against my own house. We were quite open about all this.
Fast forward to last summer, after years of reducing rents, non-payment of rent, unexpected costs, management company changes, management company walking away, I got sick of trying to stop the thing being repossessed and stopped propping up the mortgage. The money in the French bank account ran out (I have never taken any money out of this, only ever put money in).
I've just got the letter from the bank telling me that my husband and I need to appear in court in Beziers on 17th December or the apartment will be sold for 25,000 euros. The purchase price was 119,000 euros. They've added on missed payments, interest and nearly nine thousand euros worth of compensation to bring this up to 135,000. They also wish to add interest at 6.22% from last summer, this is just listed as "BRIEF" (??) They're nothing if not cheeky.
I'm not well enough to get to Beziers right now and I don't have a French lawyer (in Beziers or otherwise) but I do not want to let them just repossess unchallenged. Not because I want the property - I really don't! - but because I have read that enforcing a claim in the UK may be easier if the judgement is uncontested? And really because I don't want them to feel they can just get away with this.
I've followed the results from DGCCRF and their feedback to CCPC that three developments (not ours, but it must set a precedent?) might be liable to criminal proceedings if people brought legal cases. I maintain that fraud and misselling took place - surely the selling agents, developers, banks and notaries must all have been aware? Rent on so many of these developments has gone down after the first several years, it cannot be coincidental.
My main concern is obviously to protect my house in the UK, even if it's unlikely that they will go after it. I still don't have any other big assets for them to go after, after 16 years of having to take time out for ill health. I don't know if I can submit something to the court in writing - has anyone done this? It would unfortunately need to be in English.
I would also like to know if anyone who went through this process ever did get pursued in the UK or Ireland?
Yes we are being chased for mortgage default from 15 years ago. Coming in to Irish courts it would appear. I think we will try and fight it, has anyone attempted?? We had one of the properties in one of the 3 complexes that were part of the investigation.
I have but from France. I believe the process is easier and quicker if you are out of the country and it's not your main
/only residence. Going after you in Ireland is another matter. You may have a case for fraud, breach of contract etc but this may mean a costly legal battle. Are there others who could join?
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