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Warning. Banks and Mortgage Scams?

‘Scam’ definition: a dishonest scheme.

I am presuming that most mortgage holders are aware of the abusive clausula suelo, (floor clause) where over forty Spanish banks added a clause into their mortgage contracts stipulating that; interest rates would not fall to below a certain percentage instead of following the euribor plus interest. This clause was eventually deemed as abusive by the courts in Spain only after the European courts ruled against this malpractice. This we suppose should have meant that all mortgage holders who had this clause in their contracts, would have the clause removed and the overpayments made over many years due to the clause returned. This was not to be the case with the banks holding fast. One bank alone that by doing the right thing by the consumer, would have lost over 33.000.000 euros a month. The banks who are reluctant to lose such gains is the reason why so many homeowners are still trying to remove the clause and regain their monies. Furthermore the courts in Spain ruled that the banks would only return monies to the clients from May 2013.

Even with the furore, some banks continued to add this clause to new mortgage contracts and may still be doing so today. The banks would presume that at the notary where the signing of the purchase deeds took place, that as long as the ‘notario’ read the full contract to clients including the indecipherable clause, would be legal grounds to say that clients knew what they were signing resulting in the loss of the option to later make a claim against the bank. Most purchasers were not aware of what they were signing. The courts are not accepting this reasoning.

Though the courts have been inundated with claims over the latter years, the banks still did not remove the clause. Homeowners started to question their banks where the directors would either ignore their pleas or continue to justify the existence of the clause. The banks refusal to act is likely based on the premise that out of twenty clients who complain, only one would take legal action. Banks acted on the one case and made savings by not paying out the claims nor removing the clause of the other nineteen.

The courts have sentenced numerous banks to pay back millions to claimants and remove the clause. The same banks are now losing a lucrative profit on a monthly basis. It appears not happy with this situation, a certain bank is now contacting their clients and offering to remove the clause if the clients would sign for a fixed rate mortgage payments and, sign away their rights to make claims for repayments of the excess paid. We have written proof of the offers been made by a particular bank. With the euribor at zero, the bank is offering a fixed rate at, wait for it; 2.150% when in reality the euribor rate for May 2016 will be on average; 0.002%. The bank has provided their clients with a forecast of the euribor for the next twelve months. The banks chart conveniently shows the euribor for May at 2%.

If the banks approach those with a mortgage loan with an offer and asking that agreements are signed. It would be best to take the offer away and study it. If not understood, approach a professional.

Why should the banks have carte blanche to act in this way? The courts in Spain have ruled in many cases won that the clausula suelo is abusive, should be removed, and that the bank should return the excesses paid at least from May 2013. This again is a slap in the face when the The European commission have stated that the payments should be retroactive with most having paid in excess in their monthly repayments for many years. We are now waiting to see if the European Court of Justice will rule on the side of the consumers allowing them to reclaim since the initiation of the mortgage contract.

Due to the banks underhand actions, Thousands have had their homes repossessed (not being able to meet the excessively high monthly repayments induced by the clause) by the very banks who added the clauses in the first place. To add the icing on to the top of the banker’s cake, the banks are in many cases, allegedly taking back these properties debts free and then in many cases sold on to what is known as the ‘Fondos Buitrez’ (vulture funds.

To all who may be affected by this abusive clause can contact me for further information. For those about to sign mortgage contracts, be aware and use a lawyer. Take into consideration when borrowing that the interest rates are low which will bring the buyers back to the market but consider when borrowing at attractive offers, what clauses or rates will reappear in the future.

Important Update 22/04/16

I have been advised by the lawyers with expertise in this field that, even if a letter of agreement has been signed by the bank for the fixed rate and or giving up your right to claim, this would more than likely be considered to be null and void by the courts.

myra@citizensadvice.org.es

 

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.

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