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El blog de Maria

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

Legal post 722. Supreme Court Attorney by people´s side
07 March 2012 @ 13:41

Near to victims :as many Judges in Spain. Which makes me be very proud of the judiciary in Spain.


Friend and admired colleague Carlos Guerrero included yesterday in his blog a post on the fact that the Attorney of the Supreme Court is asking for new formulas to stop more repossessions.

As made for Banks, Government needs to come to the rescue of families. These new formulas need to mean that a citizen which is having his house repossessed by the Bank, will not be also facing the maintenance of a debt.

The Attorney deffends that as times and circusntances have changed so dramatically, old mortgage contracts need to get adapted to new times (interest only, extension of repayment period, higher amounts to be paid as last mortgage installment…)

Another possibility deffended by him are dations so both Banks and people assume loses.

An a final mentioned possibility is  State aids for the payment of remaining debts for citizens.

The Attorney has placed a marked emphasis on the need for citizenship to work for these measures to be proposed and applied within the Rule of Law.

Maybe it is that through the work of good lawyers and judges, Case law will be created for the economy and the financial principles to be revised and its focus to be recentered in PEOPLE.

There is no other way, and it is simple. The only big problem is that we have been driving too fast and far on the opposite way, but it is just a matter of turning around

Olvera. Spain - 07

"Olvera. Spain - 07", Olvera, Cádiz, Spain, by Drumsara, at

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Keith said:
07 March 2012 @ 13:46

Also the Spanish Government should bring in new measures to eliminate the Cláusula Suelo from all mortgages. This clause is abusive and is keeping the interest rates on many mortgages at artificially high levels.

This is costing many Spanish families and overseas homeowners in Spain lots of extra money each month in overcharged interest.

In my mind this abusive clause is similar to the PPI mis-selling issue in the UK. It should be dealt with by the Banco de España or Spanish Government and all banks should be forced to remove the floor limit, recalculate all interest paid and refund the amounts charged under the abusive clause.

In many cases the floor limit was set at around 4.25% and the upper limit, which was intended to protect consumers was set at around 11% or 12% and sometimes higher.

Since its inception in 2000 the Euribor has never exceeded 6% and for long periods has remained between 1% and 2%. Therefore, the floor limits and upper limits set by the Banks created a significant imbalance and were of a clear detriment to the consumer. This is a violation of good faith as these clauses were biased and totally in favour of the Banks.

The floor limits were restrictive and detrimental to the consumer and the upper limits which were designed to 'protect the consumer' were set at a level which were on most occasions more than twice the level that the Euribor has ever reached.

The Euribor is currently around 1.70%. So on a mortgage sold as Euribor + 1% you should be paying an interest rate of 2.70%. The Banks 'sold' the mortgages with headlines such as Euribor + 0.5%, Euribor + 1% etc. This was their main selling point - Euribor plus a low differential. The Cláusula Suelo was never mentioned and only included in the small print. A clear case of mis-selling.

This is just another abuse of the buyer and home owner in Spain.

Kind regards


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