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El blog de Maria

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

Legal tip 499. Hopes for new mortgage system in Spain?
13 April 2011 @ 13:28

The Commission for Justice of the Congress rejected yesterdsay two amendments to the Consum Credict Act brought by ERC-IU-ICV by which these groups tried to introduce in this Act a legislative limit to floor-clauses in mortgage loans which have already been declared abusive by Spanish Courts.As you all know, these floor clauses established unproportionate limts to the application of interest rate falls: a Seville Court declared them illegal last October2010.

The encouraging side of the new is that both PP and PSOE representatives stated that the reason for the rejection is not the lack of sense of the proposal but just a matter of a correct legislative framing. They both thknk that the matter needs Congress discussion under a different chapter: Mortgage Act reform.



Arcos de la Fronterra, Costa de la Luz, Cádiz, Spain


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Keith said:
16 April 2011 @ 23:18

The floor limit and upper limit on Spanish mortgages are clearly set at levels which greatly favour the bank. The floor limits were set at a level which was above the long term average rate of the Euribor. Therefore once interest rates started to fall the floor limits immediately came into effect. The upper limits were set at a very high level which was 3, 4 or sometimes 5 times the long term average rate of the Euribor.

The fact is that the floor limits are in effect on thousands of mortgages - but the upper limits have NEVER come into effect on ANY mortgage.........

It is clear they are set at levels which are far too heavily in favour of the banks. Therefore they are ABUSIVE.

Kind regards


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