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Spanish Off-Plan Property - Bank Guarantees - LEY 57/68

This blog is for all those Off-Plan property purchasers in Spain who have not received Bank Guarantees for their deposit funds as required by Spanish Law, in particular LEY 57/68 Article 1.1 and 1.2 and are now at risk of losing their money. In addition many purchasers who did receive Bank Guarantees are now finding that the Spanish Banks are refusing to honour them without legal action being taken by the purchaser.

05 December 2011 @ 14:30


Four out of every ten mortgage borrowers are not even informed by their banks about the rates they will apply

Nine out of every ten lenders cover up the right to choose a notary and to revise the deeds in the notary office three days before signing. - 4 October 2011

FACUA-Consumers in Action has carried out a nationwide survey into the information available and the conditions imposed on users by the banking sector when signing mortgage loan deals.

The association has gathered data of 3,252 mortgages. It has become evident that there is a huge lack of transparency in the information offered by the banks about the conditions of their loans. The study took place between 19th September and 3rd October.

Two out of every ten customers sign a mortgage without comparing offers of different banks and building societies. 10% only evaluate the conditions of two different entities, 17% look at three, 22% at four, 13% at five, 7% at six, and 11% at seven or more.

40% informed us that before applying for a mortgage loan they did not receive detailed and complete information about the rates applicable and reviews.

An even higher percentage, 55%, were not even informed about the costs and commissions applicable, previous to signing.

There is a possibility of cancelling a mortgage loan with advanced notice, either partially or completely. 39% of borrowers were not aware of the existence of a cancellation process or were unclear about the commission applied on this.

The area denounced by users as having the worst level of clarity and information available prior to signing, no less than 73%, relates to accessory obligations imposed by banks when a mortgage loan is contracted.

Elsewhere, 84% of participants claimed they would not know what to do if faced with a situation in which it became difficult or impossible to pay their mortgage.

No choice of notary, no previous information from the notary office

86% of mortgage borrowers were not informed by their bank or building society about their right to choose a notary for the formalisation of the loan in a mortgage deed.

95% also did not make it clear that the deeds would be available in the notary office for the borrower to examine, from three days prior to signing.

Likewise, eight out of ten borrowers did not know what the mortgage liability was (83%) and how much it would amount to (86%).

Nine out of ten participants were not informed of the base clause

42% of participants have a mortgage with a base clause, that has completely prevented them in profiting from falls in the Euribor. Almost a third, 27%, did not know if this clause exists in their loan deal.

87% of customers that were aware that their mortgage had a base clause were not informed by their banks or building societies of their existence, nor what they implied.

25% of consumers do not know when or how to review their mortgage.

Obligated to buy related products

88% of participants were made to buy insurance related to their mortgage so that the offered conditions could be applied. This included life insurance, home insurance, funeral insurance and rent guarantee insurance.

Contracting a savings or pension plan is an imposition suffered by 20% of borrowers. The imposing of a credit card, 38%. And the direct deposit of salary and receiving of provisions into an account, 66%.

Similarly, 16% had to contract a financial service (swaps, clips, etc.) linked to the loan. These very confusing and unclear products could represent a genuine defrauding and are being subject to numerous judicial inquiries against them.



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