Eaten alive - by abusive mortgage 'set up' costs (+Start your claim)

by Legal editorial team
Hits: 285

You could be forgiven for thinking that you would have been safer going into a crocadile pit than to your bank to borrow money!

In December 2015, the Spanish Supreme Court ruled that mortgage clauses introduced by Banco Popular and BBVA that forced borrowers to pay all of the fees surrounded or related to taking out the mortgage were abusive.

The Court ruled that the banks should pay for all - or at least part - of these mortgage opening expenses, because making a formal record of the mortgage deed is for the benefit of the bank, not the borrower.

Since then various First Instance and Provincial Appeal Courts have issued Sentences in favour of mortgage borrowers.

The Supreme Court Sentence 705/2015 dated 23 December 2015 declared abusive the following clause through which BBVA imposed on the borrower all of the expenses, taxes and commissions associated with the mortgage loan:

That clause typically read: “Borrower must pay all taxes, commissions and expenses incurred in the preparation, formalisation, correction, writing, modification – including division, segregation or any change that implies alteration of the guarantee – and execution of this contract, and for the payments and reimbursements derived there from, as well as for the constitution, maintenance and cancellation of its guarantee, being also in its charge the premiums and other expenses corresponding to the insurance of damages, that the borrowing party is obliged to have in force”

The 'nullity' declared by the Supreme Court is based on the lack of detail in the loan agreement, with regards to expenses, commissions and taxes that are being imposed by this clause in such a generic manner.

If YOU have paid all of the fees surrounding and related to taking out your Spanish Mortgage then you are likely to be entitled to a refund of some of those fees.

What are the expenses, taxes and commissions can be reclaimed ?

* Notary cost * Mortgage Land Registry costs * Registration costs (Gestoría) expenses (the company that ensures the property and the mortgage are correctly registered in the land registry – but only if the gestoría was imposed by the bank) * Property Valuation costs * Commissions on lack of payments * Mortgage cancellation costs and commissions * Any judicial or extrajudicial cost which has been charged automatically to the consumer, not following the perceptive rules of the Civil Procedure Act.

Mortgage set up fees normally represent between 2.5% and 3% of the mortgage value.

A question that is not fully settled is whether it it possible to claim a refund of Stamp Duty?

Some Judges are ordering a refund of notary, mortgage land registry and gestoría fees, but not the Stamp Duty (AJD or Documented Legal Acts Tax), which represents around 75% of the associated expenses of taking out a new mortgage.

Some claimants have claimed a refund of the Stamp Duty, with differing results.

Rulings issued by the Supreme Court and the Provincial Appeal Court of Zaragoza say it is the Bank that must pay the cost of Stamp Duty.

However, the Provincial Appeal Courts of Oviedo & Pontevedra have issued Sentences stating that the Stamp Duty should be paid by the consumer.

There is no refund for Property conveyancing costs and Property Conveyance Tax which must always be paid by the home buyer.

There is a deadline for claiming these costs and expenses - which ends 5 years from the Supreme Court ruling of 23 December 2015 (i.e. 22.12.2020).

It is worth knowing that some banks have now changed their clauses relating to mortgage opening fees.

BBVA, Santander, Bankia, CaixaBank, Sabadell & Ibercaja have all changed their clauses relating to mortgage opening fees.

By doing this they hope to avoid future claims on new mortgages.

However, this does not prevent consumers claiming refunds for mortgages signed in the past with these banks.

It will take some time to see how big the retro

Related blogs

01 of 22 About Abusive mortgage clauses - Spanish Legal information

02 of 22 About The Great Spanish Mortgage Scandal!

03 of 22 About Spanish banks forced to pay billions in compensation to borrowers

04 of 22 About Making your claim - the process and cost

05 of 22 About Key information you require about your past and future borrowing from Spanish banks

06 of 22 About Dissapointment, that the floor clauses procedure leaves much to be desired

07 of 22 About Briefly, your right to reclaim

08 of 22 About Eaten alive - by abusive mortgage 'set up' costs.

09 of 22 About Floor-clauses - 'clausula suelo. - a history

10 of 22 About Lifetime Loans or Reverse Mortgages in Spain Explained

11 of 22 Advice to Struggling Mortgage Borrowers in Spain

12 of 22 A warning about Spanish Mortgage Loans: Beware of Abusive Clauses – 8th January 2012

13 of 22 An overview of Spanish Mortgage Loans: An Overview – 21st February 2012

14 of 22 About Bank Repossessions in Spain – 21st February 2014

15 of 22 About Spain's Bad Debtor’s List (‘Fichero de Morosos’) – 8th April 2014

16 of 22 About Spanish Creditors Pursuing Debts Abroad – 8th May 2014

17 of 22 Crucially Dación en Pago explained, or, How to Hand Back the Keys – 8th December 2014

18 of 22 Report about of how the European Court of Justice Slams Floor Clauses (‘Cláusulas Suelo’) – 27th December 2016

19 of 22 Warning, that buyers in Spain from the British Isles struggle to recover refunds due to them

20 of 22 Warning, that English speaking clients of Spanish Banks have been systematically cheated for years

21 of 22 Warning, that CJEU conclusively overturns the floor clauses

22 of 22 Warning, that EURIBOR - the promises at the heart of the Spanish Bank deception
active claims for registration costs can be but it has the potential to be even bigger than the floor clause issue, because it is likely to involve every client who has taken out a mortgage.

This includes British Isles (UK, Ireland) owners too - but of course most aren’t aware of the issue and that they may well benefit from looking into this aspect of their mortgage.

Leave your comments

Post comment as a guest

0
terms and conditions.

Comments