A British couple who were unable to pay off a loan of almost 1.2 million euros secured against the value of their Marbella home are sleeping soundly again. It follows a Malaga court's decision that their remortgage had been missold by a Danish financial services company.
The lender, Nykredit Realkredit A/S, had been foreclosing on the property and the home was due to be auctioned off in order to clear the debt just two days after the favourable sentence came through.
The loan was first taken out in early 2007 with Nykredit Realkredit A/S, which had an office in Marbella, as a form of equity release by the married British pair in their 50s. According to Antonio Flores of Lawbird Legal Services, who represented the couple, they were subjected to “aggressive advertising campaigns in order to take out a 30-year mortgage as a way of saving on inheritance tax”. The financial product was marketed as a “Spanish Equity Release Package”, or “SERP”.
However instead of receiving the money for the loan, under the terms of the agreement, the amount was paid to an associated Danish company, Sydbank, with offices in Switzerland. That company then put it into an investment fund with the idea being that if the funds did well, the homeowners would received an income, including with enough money to pay off the loan.
Despite this, the fund profit wasn't enough to keep up repayments and at the same time as they were launching legal action against the lender for misselling them the product, the lender was launching its own action against the couple in an attempt to take possession of the property.
The provincial court in Malaga ordered both Nykredit Realkredit A/S and Sydbank (Schweiz) AG to pay the couple back 469,481 euros including interest.