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In uncertain economic times, many people find themselves unable to make their mortgage payments. Whether the mortgage is on a primary residence or vacation home, defaulting on a mortgage can have serious consequences for the homeowner. These consequences vary by state, province, and country, so you must be sure to completely understand them.

There are specific repercussions involved in defaulting on a Spanish mortgage. In past years, it was possible to default on a Spanish mortgage with little to no loss at all to the homeowner. This was especially true if the homeowner was not a Spanish citizen and the home was a vacation home or second residence. But now Spanish banks have become more aggressive about enforcing mortgage terms for all homeowners, even non-Spanish citizens.

If you find yourself unable to avoid defaulting on your Spanish mortgage, the bank may agree to take the home back. Turning the home over to the bank will save you a lot of money, as the bank will not have court costs associated with pursuing you for the mortgage, and your interest will stop accruing sooner. However, turning the home over to the bank is a process that must be negotiated. The bank is under no obligation to let you out of the mortgage by taking the home back. The bank is more likely to accept the home back from you if you have had a true hardship that has affected your ability to make payments on your Spanish mortgage. An example of such a hardship would be the death of a spouse or another situation that has caused your income to be drastically cut.

If you cannot negotiate a home turnover with the bank that holds your Spanish mortgage, you will need to sell the home as soon as possible. You should try to get as much from the home sale as you can, as you will still be responsible to the bank for any shortfall between the home sale amount and the remaining amount on your Spanish mortgage. If the shortfall is significant, the bank will be much more likely to pursue you for that amount. However, the bank can legally pursue the homeowner for any shortfall amount at all. This means you may face liens on any assets you own, including your primary home and investments. Although it may take years to collect on the shortfall by going through the court systems, the bank that holds your Spanish mortgage will not give up until they do.

If you must default on your Spanish mortgage, it is vital that you contact the bank as soon as possible to work with them. Working with the bank that holds your Spanish mortgage can result in a fair settlement that benefits both you and the bank with as little impact on your other assets or financial holdings as possible.