Glossary of discounted debt

A loan in default, usually more than 90 days unpaid, that the bank treats as doubtful and often sells at a discount.

A loan bought below its face value, typically because it is unpaid, with the expectation of recovering more than was paid.

A public sale of an asset ordered by a court to settle a debt. In Spain it takes place on the BOE Auction Portal (subastas.boe.es).

The right of the winner of a judicial auction to assign to a third party the right to be awarded the auctioned asset, governed by the Spanish Civil Procedure Act.

A property backing a loan: if the borrower fails to pay, the creditor can enforce the mortgage and collect against that asset.

A set of loans, often unpaid, that a bank sells in bulk to a specialised fund to remove them from its balance sheet.

The official valuation of the property used as collateral, carried out by a certified appraiser and used as the reference for calculating the deal discount and the auction starting value.

The judicial procedure by which a creditor collects a mortgage debt through the property securing it, typically culminating in a judicial auction.

A specialised company that manages the collection of debt portfolios on behalf of a fund or bank: it contacts borrowers, negotiates settlements and handles judicial enforcement.

The total face value of a debt portfolio's loans before provisions: what borrowers owe on paper, the reference against which the purchase discount is calculated.

A partial reduction of the debt that the creditor accepts in exchange for the borrower paying the remaining amount immediately or under agreed terms.

A Spanish legal arrangement by which the borrower hands over the mortgaged property to the creditor in exchange for cancelling the full mortgage debt, avoiding judicial enforcement.

A real right (mortgage, attachment, easement) registered in the Spanish Land Registry that encumbers a property and that the buyer takes on when acquiring it.

A document from the Spanish Land Registry summarising the ownership and all registered charges on a property, essential before bidding at auction or closing a credit assignment.

The amount a bidder must lodge (usually 5% of the starting value) to participate in a judicial auction; it is refunded if they do not win or deducted from the price if they are awarded the asset.

An administrative property value set by the Spanish Ministry of Finance based on the Cadastre, used as a minimum taxable base for Property Transfer Tax and other levies.

A group of assets or loans bundled together for auction or sale as a single unit. On the BOE Portal, each lot corresponds to an asset or group of assets being auctioned.

A financial asset or property whose holder is in severe financial difficulty, which may allow it to be acquired below market price.

The pre-investment analysis process covering the legal, registry, tax and economic review of the asset or credit to be acquired, to identify risks before closing.

A person or entity that submits a financial offer in a judicial or extrajudicial auction with the aim of being awarded the auctioned asset.

A court resolution granting ownership of an asset to the highest bidder at auction or to the enforcing creditor who requests it, documented in an award decree.

The transfer of the right to collect a loan from one creditor to a third party. The assignee (new creditor) is subrogated to all the assignor's rights against the borrower.