'Vulture' funds and mortgages: risks and opportunities

Spanish entities that sell mortgage portfolios have increased to ‘vulture’ funds, which has triggered interest in the possibilities that mortgages have to exercise the right of withdrawal and settle their mortgage at a much lower value

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Vulture funds are very fashionable lately. They are nothing more than venture capital funds that, for speculative purposes, invest in public debt of companies or states that are weak, in which there is predictability of financial recovery, which means a hopeful horizon of future profitability. After its start in the United States in 2008, with the subprime mortgage crisis , they have been making their way into the real estate market, also in Spanish, in search of new investment opportunities.

One of the purposes of these opportunistic funds is to buy mortgage loans on real estate, for low value, to banks, with large discounts on their value (between 20% and 50% of their nominal value), becoming They are the new creditors of the aforementioned loans. And then, what happens with the mortgaged?

Given the credit, it is advisable to proceed to the notification that this transfer operation has been carried out in order to avoid possible problems, since the debtor could make the payment of his debt to the bank instead of to his new creditor, the investment fund, which, according to our right, the debtor would be released from its obligation to pay, and the investment fund would not see its credit properly satisfied.

For its part, the debtor may settle and extinguish his debt by paying the new creditor an amount lower than originally owed, but equal to the amount paid by the vulture fund , plus the costs that would have been incurred and interest on the price from the day that the litigious credit was satisfied, and this under the right of retraction that article 1535 of the Spanish Civil Code postulates. However, in order for this benefit that the Law grants to the debtor to be operative, it is an indispensable requirement that we find ourselves before a litigious credit . That is, that debtor and creditor are in court in the courts for the credit in question, with opposition made by the debtor. The second requirement is to do it in the appropriate term, which the law establishes in a scant nine calendar days since the new creditor claims the debt.

A litigious credit is one that, having been judicially claimed the declaration of its existence and enforceability by its owner, is contradicted or denied by the defendant. The character of “litigious” is lost as soon as the sentence that declared its certainty and enforceability is firm, or as soon as the process ceases in some other way, as is, for example, the transaction between the parties.

A credit, according to some courts, may be considered “litigious” from the date of settlement to answer the claim.

Notwithstanding the above, not all credits that meet the above requirements will be considered “litigious”. In this sense, our Civil Code exempts from these assumptions the assignment or sales made to the co-heir or co-owner of the assigned right, to the creditors in payment of their credit, and to the possessor of the property subject to the litigious right that is transferred.

Consequently, the possibilities that the mortgaged one has to benefit from a sale of portfolios to a “vulture” fund and settle its mortgage debt at a lower value than the one that contracted it are really small.

The truth is that in the current context of financial crisis has increased exponentially the number of Spanish banks that decide to sell portfolios of mortgage-backed loans to these investment funds and these have burst with entrepreneurial impetus in search of attractive leaks in the credits of banks that in turn need to get rid of them given the difficulty of charging that lurks. The benefit that the banking entity obtains through this type of operations are the provisions derived from the sale of the portfolio of assets, while the investment funds, for their part, buy those toxic assets for low prices with a logical profit motive. , hoping to obtain high profitability.

In short, investment funds in litigious loan portfolios are configured as a financing vehicle for banks, and favor economic growth, but at the same time that the debtor is in danger of being released from its debt by paying an amount minor, coinciding with the price at which the litigious asset in question was sold, plus the costs and interests, under the aforementioned legal umbrella.

life insurance

What effects does the current low-interest phase have?

In the case of endowment life insurance, insured persons generally pay a monthly contribution and later receive the savings portion plus interest. With classic life insurance , a certain interest rate is guaranteed . This may not exceed the legally stipulated maximum interest rate and is also known as the guaranteed interest rate. In addition to the guaranteed rate of return, the provider also invests the insured in surpluses, which increases the return. However, these bonuses are not guaranteed and depend on the economic success of the insurer.

Due to the situation on the financial markets, the guaranteed interest rate has been repeatedly reduced in recent years. Currently, it is 0.9 percent (as of 2017). Since the providers are allowed to invest the capital of the insured with the classical variant only very surely, also the surpluses on average decreased. For these reasons, the classic variant has lost much of its appeal. Some insurers do not even offer them anymore.

Alternatively, there is the unit-linked life insurance. This offers higher return opportunities, but is also associated with a higher risk. If you are interested in a life insurance to protect the family and to build up capital, you should think carefully about which variant is best suited for your personal needs. An expert can explain the various advantages and disadvantages on the basis of his personal life situation and, where appropriate, recommend a suitable product.

Can one cancel the life insurance?

A life insurance can be terminated like any other insurance. However, any claims in the event of death or survival expire. In the case of capital-forming life insurance, insured persons have the right to have the insurer “buy back” their claims under the insurance contract . However, this repurchase value of the insurance is not only related to the amount of contributions paid so far.

Especially at the beginning of the insurance term, the contributions cover administrative costs and other fees. These can significantly reduce the surrender value compared to the previously paid premiums.

If you can not or do not want to pay contributions to life insurance at times, you do not have to cancel them immediately. It is often possible to agree with the insurer a deferral of the contributions, a contribution exemption or a payment from the surpluses . However, insured persons should bear in mind that this usually also shelves the insurance cover.

How is life insurance paid out?

How is life insurance paid out?

The life insurance is paid out to the insured at the end of the term in the form of a one-off payment. Many insurers then offer a conversion of the insurance into an immediate pension . This option is recommended if regular pension payments make more sense to the insured than a one-time, larger sum of money.



How are the payments from life insurance taxed?

How are the payments from life insurance taxed?

The benefits from a life insurance must be fully taxed for contracts from 2005 in the case of survival. That is, the revenue share is taxed at the personal tax rate, which is based on income.

However, only half of capital-forming life insurance is taxed if the insured person is at least 62 years old (since 2012) when the benefits are used and the contract has a minimum term of twelve years. If the benefits of the insurance are used earlier, the payment must be fully taxed.

Savings tip: Old contracts partly completely tax-free

Life insurance policies, which were concluded before 2005, are completely tax-exempt under certain conditions. For this, the benefit must be paid once, the contract has a minimum term of twelve years and the insured paid at least five years contributions.

Which is the right life insurance?

Which is the right life insurance?

The offer of life insurance is diverse. Interested parties can get a good overview of the available offers on the basis of various life insurance test winners. However, this is only for initial orientation, since the individual needs mostly differ from those of the test customers. It makes sense, therefore, to be supported in the search for a suitable insurance by an expert .


It is striking to contrast that although the problem of obesity had been guessing since

 documentary recently released in the United States that from obvious questions

while uncomfortable, poses a more than likely reality in which the food industry and administrations play a more than prominent role in the incidence of obesity and all its associated disorders . Its translation plays with the double meaning since Fed Up is used so much to indicate that one is fed up with food or eating so much, as to express that it is up to the … very ones in relation to a certain topic. And the theme of the documentary is obesity, its causes, its solutions and the actors involved.

Is there a relationship between the diameter of our waists, in continuous expansion, and the dietary recommendations of the health administrations ?; What if the approach to end obesity was clearly wrong? Are the proposed solutions true solutions? And if those “solutions”, in the end, only manage to aggravate the problem? What is clear, of course, is that the solutions proposed to date have coincided with an increase in obesity figures, rather than in their regression.

 the middle of the last century, it has been since the end of the decade of the 70s when its progression has taken a quantitative leap , upward, important. Precisely when the health administrations have been put to work “seriously” making recommendations in one way or another. And it has done so under unprecedented pressure from the food industry , which, when it has seen its interests in jeopardy, has tightened as it only knows how to make these recommendations and the way they are carried out as comfortable as possible. in attention to their “values”.

I am not of those who hold the view that the food industry produces a range of foods for sick people … However, their interests, “the why” the results (no doubt to improve its balance sheet accounts) includes the At the same time a serious impairment in the health of consumers . He does this by starting with the same design of his products, with his packaging, with the promotional gifts, with his constant bombardment of an unhealthy advertising, with his pressure groups, with his omnipresent presence in almost no matter what environment and thus, in short , giving rise to create an obesogenic environment that, for many people, it is frankly difficult to escape.

I find it difficult to find a criticizable aspect in this documentary.

Despite its long duration, more than an hour and a half, all the issues it addresses are of significant importance and touch them sublimely, providing the most compelling arguments and counting on the most expert opinions . Beginning at the beginning when openly questioning whether it is honest to individually blame people who suffer from obesity. An explanation that comes to the food industry very well.

In this way, to argue that all you have to do is tell people to eat less and to exercise more results in the realization of a serious problem of perspective . I say lack of perspective because this is what has been said through the “official” recommendations for almost half a century … and the global problem more than to be stopped, or at least contained, continues to increase. With this approach lies, without any doubt, the fault in the person involved . I will not say that people, individually, are not involved; but of course, collectively, it looks like there is some general reason that hinders or prevents those people from reaching the goals through the proposed solution. With sincerity, given the magnitude of the problem, I believe that we can not rest everything, not even most of the causes of the problem, on individual responsibility.

I liked it so much that, seeing it, it took me almost four hours to stop and take notes or look for more information on the web about the topics it addresses and the data it provides. In fact, there are few topics, if any, that have not already been addressed in this blog:

Starting with the absurd strategy of counting calories, the issue of empty calories , not to mention the unbridled presence of sugar in our environment (especially when it is camouflaged in “healthy” foods ), the impact of diabetes in our environment, the role of unhealthy advertising , the double game of the industry that we want to sell as healthy those foods with a worse nutritional profile , the curious partners of the health administration to cope, democratically speaking, with the problem of obesity (everywhere they cook beans), the weight of the economic cost of a healthy diet vs another less healthy diet , the importance of school menus , of nutritional and culinary education at home , of tying dogs with sausages and so on. The case, is that in addition the documentary counts on the participation of not few personalities and front-line experts who have a lot to say … and they say it, on this question.

In short it is a complete documentary that leaves the same ball on three different balconies at the same time : in the administrations, in the industry and in the citizens. It is clear that the circumstances invite us to think that the three actors involved are going to do very different things.

 the industry is unlikely to change its way of acting

 the industry is unlikely to change its way of acting

as it happened with the tobacco industry, they will continue to deny the greater since their future depends on their income and, to this day, with sincerity, I have already banished Any idea in my head that invites me to think that they will change in a positive way. For its part, it is expected that one day the administration will realize what it has in hand and what is coming as long as it continues to make the industry fat. So, while that day arrives, which I think it will, citizens are the ones who collectively have to tell the industry where they can put their products , campaigns, advertising and other private aid “for development.” It is the society that with a greater awareness and punishing at the point of sale to certain products, has to end up putting that industry in the place it deserves in virtue of the need of the population … buying more fresh products and less junk food , cooking more and leaving behind so many healthy declarations, reduced contents and enrichments in food. In short, leave ” nutritionism ” aside. If we want something to change we have to take the initiative and not wait for someone to change the circumstances for us .

I could tell you a lot more about some of the scandalous figures that are handled in the documentary or letting you know about the extortion and the sluggishness that the food industry, the different administrations and, for example, the WHO are carrying … but if it did Little would be left to see in a documentary that, despite what has been said, has very, very little conspiracy and a lot of reality . Suffice it to say that among the guests to lend their voice and image are former President Clinton, researchers from Harvard Medical School, numerous politicians from the United States, representatives of the FDA, head of the Public Health Service of the United States, Marion Nestlé … and so many others.

However, let me tell you that many other representatives of the industry were invited to participate in the documentary and did not agree . Those who refused to participate included companies such as: Coca Cola, Kellogg, Nestlé, Pepsi, the North American Beverage Association, Kraft, the Sugar Association, and so on. They will know why since the making of the documentary is, from my point of view, exquisite.

Finally, say that I leave below the link to the video that is currently posted on the YouTube channel with subtitles in Spanish. I certainly do not trust too much that I’m still hanging there for a long time as it looks like it’s against copyright. So you can see it as soon as possible and, better yet, you can already order a copy . I have already done.