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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 731. HELP for mortgage debtors!
17 March 2012 @ 15:25

 Tips for Mortgage debtors

 

Establihsed by new Decree 6/2012 of 9th of March on protection of mortgage debtors in treshold of exclusion.
 
It is a " Good practises" Code that Finantial Entities can submitt to. These are the general guidelines:
 
1.  Debt restructuration: interest only mortgages, repayment period extension, intrerst rate reduction for four years.
 
2. Possibilties for entities to offer debt reduction
 
3. Possibilities for dation in payment of debt, staying at the house under a rental agreement with a reasonable rent monthly payment.  For 2 years with a delay interst of 20%. After the two years, the agreement can be extended by mutual agreement.
 
4. Delay interest on mortgage default are moderated.
 
5. Evicted people or people under rental agreements coming after dation are protected by other national aids ( up to 3200 €). Annual incomes must be under 16.000 €.
 
6. Out of Court setlements for repossessions. Online auctions.
 
7. No Stamp- Duty tax  of Notary documents for debt restructuration.
 
8. Sanctions for people committing fraud in order to get the benefits of the Decree
 
9. Banks can apply these aids to applicants who are not under the exclusion level
 
10. No patrimony tax for dation as paymemt. No plusvalia either.


The mechanism:
 
Once a fimaly in exclusion danger ( all member without employment) starts defaulting on the mortgage:
 
1- The Bank needs to offer a debt resttucturation to the debtor within one month: 4 years interest only , 40 years repayment period, interest of never more than euribor plus 0,25.
 
2- If the mortgage fee keeps being higher than 60% of family incomes, the Bank needs to offer a 25% reduction of the debt.
 
3- If after 12 months, Bank and family do not agree on debt reduction, house is given back to the Bank and the debt is finally cancelled. Bank will allow the family to stay as a tenant for 2 years with a rental fee of 3% of remaining debt.
 
 
 
 

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EVENTO said:
14 April 2012 @ 14:39

Hi Maria,
We have a 25 yr Mortgage, based on 33% of 2 permenant incomes.
We now only have 1 income and are finding it very difficult to pay the Mortgage each month. We are up to date and nothing is outstanding. We are starting our 10th year. I have approached the Bank about interest only for 1 year, or carencia, but they are not interested at all. They said there is nothing they can do. THey do not even return my calls. What is my legal postion. Over 50% of our income is needed to cover the Mortgage each month.

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