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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 34. Mortgage holidays for property buyers and official credits for companies in Spain
28 January 2009 @ 07:19

 Mortgage holidays and financing programms for companies in Spain

 

 

ICO. ( Official Credit Insitute) Aids for Mortgage holders and  small companies in Spain.


At least 35 financial institutions have already signed a contract with the ICO to provide a moratorium on mortgage payments, a measure included in the financial support measures for unemployed families, who can defer payment of half the fee for two years, as announced today by the president of ICO, Aurelio Martinez.
Martinez pointed out that  out of the 60 financial institutions that have joined the line, promoted bu ICO,he has already signed contracts with at least 35 banks and savings banks.



At least 35 bodies provide a moratorium on mortgage payments 
 

Santander, BBVA, Caja Madrid, La Caixa, Sabadell y Pastor  are among the 60 entities that have joined the partnership agreement of the ICO, which publishes a list on its website which is updated daily. Banca March, Banco Guipuzcoano, Cajasol, Ibercaja, Caja Vital and BBK have also joined.

Postponement of the mortgage
Specifically, the line, equipped with 6,000 million euros, will allow the temporary postponement of partial payment obligation of 50% of the mortgage share of the years 2009 and 2010, with a maximum of 500 euros per month.

The line is aimed for groups in especially difficult circumnstances which are holders of a mortgage on their habitual home of no more than 170,000 euros, which had been  formalized before September 1 and  who are not in arrears.

 

 

 

To qualify for this line, the applicant must demonstrate by 2010 one of the following conditions: being unemployed and being paid the subside during the three months before the application, being a  self-employed with cessation of activity during that period, being a  widow  pensioner of someone who has died after the signing of the mortgage, or having incomes below three times the monthly indicator of Public Income Multiple Effects (Iprem).

The term of payment of the deferred shares will begin in January 2011 and the  repayment period may be of three, five, seven or ten years, but in no case it will exceed the term of maturity of the mortgage. The interest rate for these deferred instalments will be variable and will be published fortnightly on the website of the ICO.

"Low demand for ICO copmpany aids"

 
Also, Martinez stated that the liquidity line of the ICO, endowed with 10,000 million euros to meet the financing needs of capital for small and medium enterprises, which are solvent and viable, will succeed. Of this amount, 5.000 million are provided by ICO and 5,000 by credit institutions.

Martinez acknowledged that the line has so far received "low demand", which attributed to the novelty and assimilated to the lukewarm reception of the initial auction of liquidity. However, he maintained that "there is an avalanche of applications from the self employed and that  the line will be used in its totality for sure”

On complaints from some employers who go to banks to apply for these lines and are informed that the ICO has not yet provided liquidity, Martinez considered normal for the staff of the entities to look for  responsible outside thei companies . "The staff is working for an entity and it has to defend it above all else”

And added that since the ICO made the first auction, the line is open to all entities and without limit, he said. " As far as financial institutions come and send proposals to us, we will distribute liquidity for them.


The ICO help line was hung on the website of the ICO  on December 23.

 

Free Translation from Europa Press news at El Economista by Maria de Castro

 

 

By Maria L. de Castro

web@costaluzlawyers.es

www.costaluzlawyers.es

 

Playa de Almuñecar, by Guervos at Flickr.com



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