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By Sarah White
MADRID (Reuters) - Spain's "bad bank" not only has to sell the soured property loans and unwanted housing it took on from the country's rescued lenders - it first has to find them.
A review of the 51 billion euros ($66 billion) of property loans and buildings transferred to the state-run vehicle as part of the industry clean-up has uncovered swathes of incomplete records, including tens of thousands of missing addresses, three sources familiar with the process said.
Keys to the wrong homes have also been among the challenges faced by teams of lawyers and property experts hired to sift through the assets and value them, two of the sources said.
The administrative muddle risks delaying the sale of assets and ultimately how much money the bad bank, known as Sareb, is able to salvage from a property crash that drove many of the country's banks to require a European bailout.
Belen Romana, who chairs Sareb, said this week the bad bank had sold just 700 properties by June 1. Its target is to sell 45,000 properties in five years and it is aiming for an annual return on equity of 13 to 14 percent over its 15 year lifespan.
"The front office of Sareb looks like a merchant bank with people in pin-striped suits and nice ties," said a real estate broker familiar with the organization, which is trying to seal its first major sale of a portfolio of properties to investors.
"But behind the scenes ... you have an army of people in a warehouse scanning and filing documents and combing through data tapes. That's where the mess is."
Sareb declined to comment.
Sareb's roughly 107,000 properties and 90,000 loans come from nine rescued lenders such as Bankia <BKIA.MC> and Barcelona-based Catalunya Banc <FROBNC.UL>, and these banks still have the contract to manage the assets.
The loans are linked to another roughly 400,000 properties or tracts of land used as collateral, two of the sources said, adding that tens of thousands of those lacked proper addresses, hindering the valuation process.
"We had some addresses with just '4C' registered as the address, and with the name of a very common street in Spain," one of the sources said, speaking on condition of anonymity.
"You might also get 150 assets and addresses then realize they are all one same apartment hotel," the source added.
The review of the collateral has already delayed the valuation process by some weeks, the sources said. Thirteen firms including law firms, property consultants and accountants, led by Clifford Chance, are working on the process.
"There were instances with one of the banks involved where people went to check out a property and were given the wrong keys, or were told there was no-one living there and walked in and there was," a third source familiar with the process said.
Binding bids for the sale of Sareb's first portfolio of properties, of about 100 million euros, are due in mid-July, a source close to that situation said.
U.S. funds Lone Star, Cerberus Capital Management and Apollo Global Management <APO.N> are among those still in the running, the source said.
($1 = 0.7778 euros)
(Additional reporting by Jesus Aguado and Tom Bill in London; Editing by Julien Toyer and Mark Potter)