Mortgages

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The Gates Open to Claims of Abusive Interest Index IRPH in Spain

mortage rate claims spain

The conclusions of the General  Attorney of the European Court of Justice were announced on the morning of Tuesday, September 10th 2019, and represent a blow to both the Spanish banks and to the Supreme Court's ruling of December 14th, 2017, that stated that mere reference to the index did not imply a lack of transparency. Their conclusions, although not binding, mark the path to be followed by the EUCJ in its sentence that is expected by the end of this year 2019. And could mean that Spanish banks will end up paying out billions of Euros in compensation to up...

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Clausula Suelo – Floor Clauses in Spanish Mortgages

Before the Judgment of the Court of Justice of the European Union of December 21, 2016, Banks offered agreements to their clients with a floor clause by which the financial entities agreed to eliminate this clause from the mortgage without returning the amounts already overcharged and forcing the mortgage holder to sign that they could not take further legal action to, mainly, request that amount they had already overpaid for the floor clause.   Until April 2018, the Spanish Supreme Court declared that these modifications or novations were not effective, allowing the option for the consumer to take action to declare the...

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A Judge in Ceuta asks the CJEU for a ruling on mortgage related expenses

A Judge in Ceuta has decided to submit a preliminary ruling before the Court of Justice of the European Union (CJEU) so that it may rule on whether the latest judgments of the Spanish Supreme Court, by which the expenses of formalizing the mortgages between the bank and the client were distributed, are contrary to the European Union Law and its jurisprudence, in terms of the protection of consumers on abusive clauses. Doubts arise to the judge on how to deal with the issue, because although it was already warned that these types of clauses are null, how is it possible...

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New CJEU Sentence to favour mortgage holders in Spain

The recent Judgment of the CJEU, dated March 26 2019 on the early expiration clause in Spanish mortgages, has confirmed its null and void character as was already declared by the Spanish Supreme Court.     The important question now is whether the contract can exist without the early expiration clause, especially the one that allows the lender to terminate the contract after a one month default.   As the clause is not essential in the contract, THIS CAN EXIST WITHOUT IT as in case of default, the lender may demand compliance or resolution through other means established by Law.   But, one thing is the existence...

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Nullity is nullity. Spanish Judges put case before the CJEU on abusive mortgage clauses

The chief Judge of the Court of First Instance No. 17 of Palma de Mallorca has filed a preliminary ruling before the Court of Justice of the European Union (CJEU) in regards to the critical situation created by the recent decisions issued by the Civil Chamber of the Supreme Court. The magistrate claims to unify interpretive criteria to defend the legal security that must exist in our State of Law, avoiding contradictory judgments that cause "a serious and irreparable harm to consumers” The question raised has been registered with the reference C-224/19 and its purpose is for the CJEU to analyze whether...

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The New Mortgage Act in Spain

When does the new Mortgage Act come into force? Not before May 2019   How is the distribution (bank-consumer) of mortgage expenses regulated?   The client will only pay the property valuation (between 300 and 600 euros) Valuators can be freely chosen by the client. They can be individual persons. Rest of the expenses will be paid by the bank (mortgage management, Stamp Duty Tax (IAJD), Notary and registration fees). Some entities have already begun to announce that they will also assume this expense in the new contracts. Saving on Stamp Duty is the most important one: depends on each autonomous community and can...

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Oppose the bank if you are sued for non-payment of your mortgage

Why is it easier now than ever? Different circumstances related to abusive clauses in Spanish Mortgage contracts and the revision of these by European Law, has created a never seen before scenario of protection for the mortgage holder. Some of these circumstances are: - Mortgages with early maturity clauses: The judges in virtually all of Spain have stopped the mortgage enforcement procedures pending the decision of the European Court on the possible nullity of the clause of early maturity. 2.-Sale of mortgage debt to investment funds: The Bank or the investment fund, depending on how the transfer was made and if this was...

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Free yourself from your burden as a guarantor in Spain

I volunteered as a guarantor of my son's mortgage loan (I am an avalista) and want to see if I can get rid of that burden. Can I stop being a guarantor? Yes, there are two arguments based on Consumer Law for you to argue against the bank for the nullity of the guarantee clause: One is the lack of transparency because with the endorsement clause, the waiving of the benefits of division and excussion are usually imposed with no explanation of the legal and economic significance of such benefits or no indication of joint and several liability. Another is the argument of the...

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Are Bankia and Banco Sabadell about to sell your mortgage?

If they are then there is evidence to suggest that you should oppose it. As a matter of fact many mortgage enforcement proceedings are paralysed in Spain at the moment until the European Court solves a matter brought to it by Spanish Supreme Court. Our experience tells us that, under this scenario, Banks are willing to settle in those cases when you give your property back to them in payment of the remaining mortgage debt. Do your calculations as it might be worth a try. Contact us for more information.  ...

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Possible nullity of multi-currency clause in a mortgage loan

The recent Supreme Court Sentence dated 26 November 2018, deals with the validity of the novation of a mortgage loan in which the parties modified the agreed currency, replacing the euro with the Swiss franc and converting the outstanding capital to be amortized from euros to Swiss francs. The analysis of the Supreme Court, inspired by important cases resolved by the CJEU such as the Andriciuc case or the Kásler and Káslerné Rábai cases and by the Supreme Court's previous decisions, centers its analysis on the contractual good faith required of financial entities. Bank´s Good Faith or “bonus argentarius” doctrine by Spain´s...

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