LOS INCONVENIENTES A LA POSIBILIDAD DE LA ADJUDICACIÓN EN PAGO DE LA FINCA HIPOTECADA AL ACREEDOR EJECUTANTE: UNA PERSPECTIVA DESDE EL DERECHO CIVIL.

Abstract

This paper looks at whether what is incorrectly known as «surrender in lieu of payment» ought to be accepted. «Surrender in lieu of payment» refers to the situation where, for lack of other bidders, a foreclosing lender is awarded the mortgaged property at judicial sale for less than the secured debt and the debt is declared settled. From the standpoint of civil law, there are drawbacks to surrender in lieu of payment as a viable solution in Spanish legislation. We examine these drawbacks, and we find the solution inadmissible. Were surrender in lieu of payment to become widely accepted, the function of the mortgage as security would be infringed, the rule of the accessory relationship of mortgages would be upset, the rule of unlimited personal liability of debtors would be overturned, and the exception from the limitation of mortgage liability would be altered. Furthermore, law itself rejects the possibility, and the arguments born of banking practice advise against it. The possibility of accepting surrender in lieu of payment generally in Spanish legislation is, in short, rejected.