Due to the crisis that has plagued our country for several years, many of the citizens have been in the unpleasant situation of abandoning their houses and homes for not being able to face their mortgage payment.
Evictions have been the order of the day due to these reasons, giving in some cases the possibility of handing over your property to the bank as payment for your mortgage debt.
This banking solution is called dation in payment, which consists of regulating the legal situation of users offering the possibility of paying off their mortgage debt by handing over their home in exchange.
This type of process is an agreement between the mortgaged user who owns the home and the creditor bank, which is established due to the inability of the debtor to meet the mortgage loan payment. Not being able to take charge of complying with the mortgage payment, the debtor delivers the house to the bank, always attaching a previous appraisal of it. By accepting this action, the debt would be extinguished, canceling the mortgage loan.
The banking process of dation in payment is a benefit for the debtor in the face of the impossibility of facing a mortgage loan that, without resources, benefits or aid, can regularly amortize or pay the mortgage. These types of resources avoid legal proceedings that lead to the seizure of the home and being in debt without the possibility of stabilizing.
The dation in payment is advantageous for the mortgaged user since, in the face of a foreclosure process, it could be the case that the property goes up for auction for a price lower than the debt, which would lead to the debtor still owing money to the bank and in a normal process, the entity could claim it. In the case of opting for the dation in payment, the mortgaged client must bear in mind the possible taxation in the personal income tax referring to the capital gain as well as the tax on the Increase in the Value of Urban Land (taxes on housing in question).
The dation in payment procedure supposes a series of benefits also for the financial institution, these benefits are focused on the fact that it avoids the costs as well as the stipulated duration of the foreclosure. In this way, the derivatives of the internal actions of the process are also saved, that is, applying the accounting regulations in the event of an act of default.
However, from the perspective of a financial institution, this banking process is not the best solution for it since it involves the entry of a property that they have to "sell" being this type of products unrelated to the type of products that they usually sell or offer. The bank would take charge of a real estate, not being a specific entity for its purchase and sale, in addition to losing the right to obtain those interest for late payment of the mortgage loan.
On the other hand, the dation in payment procedure is determined by certain taxes related to housing such as VAT and those applied to businessmen and individuals (ADJ and TPO).
Similarly, when a debtor user reaches an agreement with his bank to retain the dation in payment and put an end to the contracting debt, the property deed must be provided as well as the relevant property registry.
This solution is one of the most successful for a client who, without having any type of income or benefits, can face the payment of a mortgage loan. By handing over a real estate to the bank, the debt is fully extinguished as well as the default interest and the loan itself, a new beginning for a client seeking a new social opportunity.
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