One of Spain’s largest banks is believed to have frozen non-residential mortgage applications after one of its introducers was arrested for mortgage fraud.
The Spanish authorities raided the offices of a brokerage based on the Costa Blanca and arrested the proprietor on the grounds of providing false documentation to banks.
As a result Caja Mediterraneo, the bank involved in the investigation, is thought to have instructed its branches not to accept further non-resident mortgage applications until the case has been investigated.
Caja Mediterraneo is one of the largest providers of non-residential mortgages in Spain.
Following the raid, clients who had used the broker’s services were subject to visits from the Guardia Civil. It is not known whether further arrests have been made.
Gwilym Rhys-Jones, adviser to the Costa Del Sol Action Group Ag-ainst Unregulated Financial Advice, says Caja Mediterraneo will not be the last lender in the area to limit non-residential loans.
He says: “There will be a domino effect. Too many brokers are using fraudulent documentation for mortgages. It’s not surprising banks have got nervous.”
Heather Chambers, director of International Mortgage Solutions, a provider of non-residential international mortgages based in the UK and Spain, says: “We have come across instances where clients in Spain have been talked into making false mortgage applications.
“Brokers make no attempt to protect their clients – all they are concerned with is commission. We hope the legal system will clamp down on such practices.”
Caja Mediterraneo was unavailable for comment.