An appeals court in Évora has overruled a landmark case in Portimão that gave hope to all householders in danger of defaulting on mortgage payments.
The Tribunal de Relação (TRE) decided last week that it is now not enough for debtors to wipe clean the slate by giving their homes back to the bank, lock, stock and barrel if they can no longer make mortgage payments.
The bottom line is that if the house cannot be sold for the full amount originally lent by the bank, it is the mortgage holder who must make good any difference owing and this debt can be seized from the mortgage holder’s salary.
Representing the Millennium BCP bank that appealed against the ruling of the Portimão court, lawyer Hélder Ferreira said: “In the eyes of the law there is no doubt that the bank must always be reimbursed for the money that it has lent. The bank sells money, not property,” he added, and the risk that the property might drop in value has to be taken by whoever “takes the house to the bank and decides to buy it”, not by whoever finances the deal.
It is a decision that casts yet more agony on desperate cases where people default on their mortgages. It also goes against a similar ruling made by a court in Portalegre in 2012 where the bank in question has also appealed.
The TRE is expected to hear the appeal very soon, writes Público newspaper, but the inference is that the second case will go very much the way of the first.
