In the event of under a mortgage loan, the creditor financial institution may move to judicial enforcement proceedings to recover the amounts owed. These judicial proceedings are developed, in a simplified way, based on the following points:

1. Executive request

The creditor financial institution will file a claim against the debtor. In order to be able giving up all the debt and claim it judicially to the client, the delay in payment must be more than 3 months.

2. Notification of the demand to the debtor and request of payment

In addition to notifying the debtor of the commencement of judicial proceedings, in the event that the financial institution did not require payment to the debtor prior to the commencement of the judicial proceedings, the debt will be reclaimed. This is one of the essences of Foreclosure Auctions.

3. Certification of the Property Registry.

The judge will request from the Property Registry a certification of the registration of the mortgage and list of other charges included.

4. Auction of the mortgaged property and payment to the creditor financial institution.

Until the date set for the auction, the debtor may stop the foreclosure proceeding provided by paying the principal and interest at the time of filing the claim, increased by the principal and interest maturities ( that have been produced so far), to which must be added as the costs of the procedure. In any mortgage deed, the valuation of the asset must be specified for auction purposes. This amount may not be less than 75 percent of the amount of the appraisal of the good that was made for the granting of the mortgage loan.

When the auction is held the following assumptions can be made:

Equal to or greater than 70 percent

When the best position is equal to or greater than 70 percent of the value for which the good has been auctioned, the auction will be approved in favor of the highest bidder. If the best position offered in the auction is less than 70 percent of the value for which the good goes to auction, the executed has 10 days to present to a third party that improves the posture (offering an amount equal to or greater than 70 percent), or even less than that amount as long as it’s sufficient to achieve the complete satisfaction of the right of the performer. After the deadline has elapsed without the debtor performing the above, the executor may request the award of the asset for 70 percent of that value or for the amount owed for all items, provided that this amount exceeds 60 per cent of its appraisal value and the best posture.

When the performer does not make use some conditions mentioned in the previous paragraph, the auction will be approved in favor of the best bidder, provided that the amount exceeds 50 percent of the appraised value or, if inferior, covers at least, the amount for which the execution was dispatched, including the forecast for interest and costs. If the best position does not meet these requirements, the Judicial Secretary will be responsible for execution, after hearing the parties. The judicial party shall decide on the approval of the auction in the light of the circumstances of the case and taking into account, in particular, the conduct of the debtor in relation to compliance.

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