Dear Indemo Community!
Over the past two weeks, our team has spent a lot of time looking into the situation around the new housing decrees in Spain. These developments have come right in the middle of a heated election season. We've been studying the legislation, discussing it with lawyers and our partners, and looking closely at how the new requirements could affect our product.
When there are so many dramatic headlines, it's important to understand what the law actually says and, more importantly, how it will work in practice.
All five legal teams of our servicing partners were involved in this analysis — from hands-on litigation lawyers who handle our cases in Spanish courts every day to large corporate legal teams. This allowed us to bring together strong practical and legal expertise and assess the situation from different angles.
I'd like to share our main conclusions and explain why we remain calm and confident, while continuing to follow developments closely.
What's happening in Spain?
Housing has become one of the central topics in Spain's political battle. The first versions of the decrees proposed by the government were rejected by Parliament on 2 October. Then, on 5 October, Parliament was dissolved and early general elections were called for 29 November.
The government subsequently introduced revised versions - RDL 28/2026 and RDL 29/2026 - which still need to go through parliamentary approval.
Given the upcoming elections, some of these measures may still be rejected or revised. However, Indemo’s strategy does not depend on that outcome — we have also assessed the scenario in which the new rules remain in place for several years.
It's important to understand that this is a broad package of measures, not a law specifically targeting the mortgage debt market. It covers rental regulations, tenant protection, government support for homebuyers, tax benefits, and even a new investment account regime for Spanish residents. The secondary mortgage debt market has been affected because recovering mortgage debt can sometimes result in the creditor taking ownership of the underlying property.
Here is our main conclusion: based on our current assessment, these changes do not undermine the fundamentals of Indemo's mortgage debt investment product, and we assess their overall impact on our product as low.
Our assessment also covers the existing portfolio, not just future acquisitions, with particular attention to cases where these new requirements could affect recovery strategies.
Now, let me explain why by looking at the two areas that matter most for our product.
1. The restriction on buying residential properties below 70% of their value
The most important thing here is not to confuse buying real estate with buying mortgage debt.
At its core, the Indemo product is about purchasing mortgage debt - or, more precisely, claim rights - not apartments or houses. Based on our legal assessment, the 70% rule applies to the acquisition of residential properties, not to the purchase price of mortgage debt.
This means the new rule does not prevent us from continuing to purchase mortgage debts at significant discounts or offering this investment product on the platform.
But what happens if one of the recovery scenarios involves the creditor eventually taking ownership of the property?
In that case, the rule does need to be considered. However, the value of such an acquisition is not the same as the original purchase price of the debt or the PTV ratio we're all familiar with.
What matters is the overall structure of the transaction: the total outstanding debt, the portion of that debt used when taking ownership of the property, any cash payments, and the liabilities assumed. As you may remember, in many of our cases, the outstanding debt is already close to or even higher than the value of the underlying property.
At the same time, we take into account taxes, legal expenses, and other costs to understand the full economics of each deal.
In simple terms, purchasing a mortgage debt at a deep discount does not automatically mean there will be a problem with the new restriction if we later take ownership of the property.
Our conclusion is that, with proper calculations, monitoring, and active deal management, we do not see this restriction as an obstacle that would prevent our product from operating successfully.
2. Eviction moratorium: there's much more behind the headlines
The phrase "evictions suspended until 2030" might make it sound as if the entire mortgage debt recovery process has come to a halt.
That's simply not the case.
The measures are designed to protect people living in residential properties who meet specific social vulnerability criteria and have no suitable alternative housing available. Depending on the applicable rules, other circumstances also matter, including whether local authorities can provide alternative accommodation. This is not automatic protection for anyone who simply stops paying their mortgage.
First, protections for vulnerable mortgage borrowers are nothing new in Spain. They have existed since 2013, have been extended several times, and were already in place until 15 May 2028, even before the latest decrees.
Our legal teams are familiar with these situations. They know how to assess whether someone genuinely qualifies for protection, how to handle legitimate claims, and how to challenge cases where such protections are claimed without proper grounds.
The most important work starts long before we actually purchase a debt.
As you may remember, only around 10% of the investment opportunities our partners review eventually make it through to acquisition.
During due diligence, our partner companies investigate whether the property is someone's only home, whether anyone actually lives there, who the occupants are, and on what legal basis they occupy it. They also assess potential social vulnerability risks.
Many deals with an unfavorable combination of these factors are filtered out at this early stage, because they do not correspond to the social responsibility policy we and partners follow.
Of course, people's circumstances can change after we acquire a debt. This is where one of the key strengths of our servicing partners comes into play: an individual approach to every case and a strong focus on out-of-court settlements.
The goal is not to evict people at any cost. The goal is to find a reasonable solution that allows us to recover investors' funds while following our social responsibility principles.
The economics of our product in the form of the purchase discount allow us, where appropriate, to offer compensation, help with relocation, or even assist in finding and paying for alternative accommodation.
Such an agreement can often be faster and more beneficial than a lengthy court battle - for both sides.
There's another important point: suspending an eviction does not mean the debt is written off or stops growing. In most cases the debt is already close to the property value or is higher, which may create an additional incentive for the debtor to reach a settlement, not delaying cases.
If applicable interest continues to accrue on the outstanding debt and recoverable legal costs are added, the total amount owed may continue to increase over time.
This means that reaching an agreement can still be in the debtor's best interest as well.
It's also important to remember that taking ownership of the property is just one of several possible exit strategies.
Other options include reaching an agreement with the debtor, arranging a property sale as part of a debt settlement, selling the property to a third-party buyer through a court auction, or selling the debt itself on the secondary debt market.
The 70% threshold described earlier does not apply to the sale price of the debt itself.
3. New challenges also create new opportunities
We continue to keep a close eye on developments through our partners and industry associations. We're following the parliamentary approval process, further legal clarifications, and, most importantly, how these new requirements will actually be applied in practice.
At this stage, we assess the overall additional impact of these changes on our product as low.
Yes, in some individual cases, while courts and other parties adjust to the new rules, there may be delays, additional requests for documents, or a need for further clarification of specific legal provisions.
This is exactly why Indemo’s product model has always included not only the most optimistic scenario but also a worst-case scenario, with potential delays already factored into our initial assessments.
Additional flexibility will come from the platform's secondary market, which has now reached the final stage of development. Once launched, it will allow investors to look for buyers for their investments before the underlying recovery process is completed.
And finally, a few words about social responsibility.
We share the broader goals of making housing more affordable and helping people who find themselves in difficult financial situations.
We want our work to help bring properties back to the market at realistic prices, find practical solutions to debt problems, and, at the same time, give our clients an opportunity to invest and grow their capital.
We've previously shared more about our approach to social responsibility and how it works in practice in a dedicated article: Understanding NPLs and the Social Responsibility Behind Debt Resolution.
For us, protecting investors' interests and treating debtors responsibly are not opposing goals - they are two important parts of the same business model.
There is also another side to this story: market changes may create new acquisition opportunities.
Thank you for your continued trust!
Sergejs Viskovskis
CEO & Co-Founder, Indemo
This content is a marketing communication. It shall not be treated as investment advice, independent research or offer, recommendation or invitation to invest in the investment opportunities referred to herein. The content is not aimed at promoting services or products to persons based in jurisdictions where the distribution of said information would be illegal.
Investing in financial instruments involves risk, and there’s no guarantee that investors will get back invested capital. Moreover, past performance does not guarantee future returns. Indemo SIA shall not be responsible for any direct or indirect loss from using the provided information.