mortgage rip off

Started by conair, August 03, 2012, 19:46:57 PM

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conair

Just trying to find out the general situation regarding the interest rates the banks are charging.
Unfortunately have 2 mortgages with solbank and are currently being charged 4.5 %.
With all the hoo haa regarding rates in Spain and the euribor at the lowest level ever just over 1% why are the rate sbeing sharged still so high.

Deso

Our mortgage is 0.75 over 12 month euribor and for this last year has been around 2.3%.
If the rate stays roughly as it is then next years will be around 1.8 ish.
Regards, Neil
Looking forward to the day I tick the "One way only" box when booking flights to Fuerte. [:)]

conair

Hi Deso.
Thanks for your reply.
Is this a solbank mortgage or another bank.
Thnaks

Lostboys

you my also find that you have a floor limit on your morgage meaning that no matter how low the Euribor falls, your mortgage will not fall below this percentage.  This will be stated on your title deeds where you signed for your mortgage.  Between 2007 and 2012 many banks were adding this to mortgages although it has since been proven to be illegal.
Have a look at your mortgage deeds and if you do have a floor limit, speak to you bank first about getting this removed.  If they refuse, speak to your lawyer about it.

TheCooler

Hi Lostboys,
When was the floor interest deemed illegal?
Many thanks
The cooler.

fifi

#5
Here you are The Cooler


According to a report made on the 4th of February, the Nº 11 Commercial Court of Madrid has agreed to process the largest class action lawsuit filed in Spain against 45 financial institutions for the implementation of so called "ground clauses" in mortgages.

Judge Miriam Iglesias accepted the application filed by the consumer association Adicae and opened a period of two months to all those affected by this type of product.

In addition, the judge will forward the complaint to the prosecutor for a decision in this regard and has opened a separate section to decide whether to adopt the precautionary measure requested by Adicae to immediately paralyze the inclusion of these clauses in mortgages until the process is completed.

For now, the lawsuit has been filed on behalf of around 400 bank customers and it calls for the invalidity of these clauses due to gross disproportion between the floor and ceiling limits on interest rates fixed on mortgage contracts.

"Ground clauses" set a minimum threshold of interest payable, which has prevented many customers in benefitting from the fall in the Euribor (the main reference rate in variable mortgages). These clauses were mainly included in mortgages given between 2007 and 2008.

At the request of the Senate, the Bank of Spain has completed a report which shows that in Spain there are 3.8 million people with these types of clauses in their mortgage contracts. Adicae estimated that in 2010, the banks received between 3,500 and 7,000 million euros for these clauses at the detriment of the consumer.

The defendants are: BBVA, Banco Pastor, Banco Sabadell, Banco Popular, Banco Guipuzcoano, Banco de Galicia, Banco Gallego, Banco Vasconia, La Caixa, Caixa Galicia, Caixa Inmaculada, Caixa d´Estalvis de Girona, Caixa Manresa, Caixa Nova, Caixa Ontinyent, Caixa Penedés, Caixa Rural de Baleares, Caixa Sabadell, Caixa Tarragona, Caja Castilla-La Mancha, Caja Círculo, Caja de Ahorros de Extremadura, Caja de Badajoz, Caja Duero, Caja España, Caja Canarias, Unicaja, Kutxa, Caja Granada, Caja Insular de Ahorros de Canarias, Multicaja, Caja Rural de Asturias, Caja Rural de Cuenca, Caja Rural de Granada, Caja Rural de Navarra, Caja Rural del Sur, Caja Segovia, Caja Sol, Caja Sur, Cajalon, Caja Mar, Caixa d´Estalvis de Catalunya, Tarragona i Manresa, Caixa d´Estalvis Unió de Caixes Manlleu Sabadell i Terrasa, Celeris Servicios Financieros and Credifimo.

In October 2010, the Nº 2 Commercial Court of Seville imposed the first judgment in Spain against 5 banks by declaring that these ground clauses were abusive and forced the banks to eliminate them and to refrain from using them in successive contracts. This decision has been contested and is on appeal with the Provincial Court of Seville.

The judge then concluded that the abuse lies in the apparent gap between the floor and ceiling limits of mortgages which provides a benefit to the bank whatever way the mortgage rate goes.

                                                        ................................

It was estimated that 9000 mortgages were affected by this in Fuerteventura and a group action was taken subsequently by Adicae.

Some of the Forum members managed to get a refund from their banks after getting in touch with Adicae and their Lawyers. I put all of the articles and details about how to go about it on an old thread called READ THIS THEN CHECK YOUR MORTGAGE but I cant manage to open it....maybe it was one of the ones that got lost in Cyberspace....but try it and see....it might open for you. :)





Deso

Quote from: conair on August 04, 2012, 17:16:37 PM
Hi Deso.
Thanks for your reply.
Is this a solbank mortgage or another bank.
Thnaks

Barclays in Rosario.  :D
Regards, Neil
Looking forward to the day I tick the "One way only" box when booking flights to Fuerte. [:)]

TheCooler

#7
Thank you Fifi ,
The banks are still using the floor in their mortgage conditions .
I have recently purchased and the floor was part of the conditions.Banca Sabadell
What should be my first course of action?
Many thanks
The Cooler

fifi

#8
Its a pity I cant manage to open the links from the old Forum. I had all the details there. I will ask Admin if there is any way of accessing them. First of all I guess you should contact your bank and ask them to check it for you and if you do not get anywhere with them  you could contact the Financial consumer complaints office which started the first group action and see what they say. I know someone that got €800 back immediately before he even submitted a legal claim by just going to the bank. Here is the link.... http://adicae.net/



fifi

#9
There are a few articles about it on their website if you want to run them through Google translate. I havent had the time to read them to see the updates. http://afectadosclausulasuelo.org/#  http://afectadosclausulasuelo.org/archivos/AdicaePropuestaLeyClausulasSuelo.pdf

Waiting to see if Admin get back to me about the old threads. :)

PS. A July magazine here all about the ground clauses....http://www.afectadosclausulasuelo.org/archivos/Periodico-Boletin_ESPECIAL_CLAUSULAS_SUELO_2012.pdf

fifi

Sorry the old thread was lost with the change over to the new Forum. I will PM you if I find out the details from my friend about his case.

TheCooler

Thank you Fifi for all your efforts. I am out next week and I will make tentative enquiries at the branch.

fifi

Welcome. Good luck with it. :)

conair

Spoke with solbank today and they say that the floor is no longer applicable to new mortgages but deny any liability for existing mortgage holders wit this clause in their deed.

TheCooler

I'll be making the same call tomorrow . Took my mortgage in feb 2012, and I have the collar in my clause.
After my first years fixed rate goes , hopefully I can get unlocked from this unfair practice.
Can't contact a lawer though, they all seem to take the month of August off.

TheCooler

Quote from: conair on August 08, 2012, 20:40:02 PM
Spoke with solbank today and they say that the floor is no longer applicable to new mortgages but deny any liability for existing mortgage holders wit this clause in their deed.



I contacted Solbank, atlantico branch (via e /mail) requesting the removal of my clause.
I have revived the branches reply .
They state that they believe the sentence was against BBVA, & incredibly, they state that all new mortgages still contain the min/ max rate clause, and you couldn't make this up , the min rate has now increased to 4.5% from 4.25%
Oh and I can't have the clause removed.I will let the dust settle ,& then it's roll your sleeves up time.

dagwood

Banks are at every trick in the book and when they get caught its an error. Always rember banks are bas tards.  Thats the first lesson given in the financial services industry.

raye

I have e-mailed Banco Popular re my ground clause and this is the brief and curt reply i got:

"Your mortgage is based on the Euribor , but the problem is the ground and we can´t remove it.

Sorry and regards"

conair

Sounds like a number of the banks are sticking together wth their reponces.Have previously heard that a few clients were offered refunds does any body know which are the banks that have offered this.

dagwood

Is there a Spanish version of The Consumer Credit Act or a Regulator of Spanish banks you could speak to.Its  suppose to be the same all over the EU states. Also I would ask for one of those complaint forms that all retail outlets in Spain must keep. Dont forget a bank is a retail outlet.   

fifi

Adicae are the consumer association for the banks Dagwood. I found a reasonable explanation in English about what is going on here.... http://www.spanishpropertyinsight.com/buff/spain/faq/spanish-mortgage-loans-beware-of-abusive-clauses/

The July Adicae magazine above lists the banks that are involved in legal cases.

dagwood

Interesting stuff I will study it later. When you look at the carry on of our own banks, British and Irish it makes you ask yourself what tricks are they up to if you cant read the contract. Just rember the banks are stuck for money and desprate people will do desprate things. 

fifi

This bit is interesting....

3. Mortgage resetting rate. This particularly annoying abusive clause allows the lender to automatically reset the mortgage interest rate when the referred index increases (i.e. Euribor) but requires the borrower to notify the lender formally when the opposite takes place. This may not be a problem when you live in Spain but may become a real nuisance if you live abroad as you will surely skip the deadlines to notify the lender meaning you will not be able to benefit if the referred interest rate decreases.

A variant of this clause is the unique ability of lenders to react swiftly and efficiently to rises in the interest rate of reference in a mortgage loan but likewise show an inordinate inability should the opposite happen. Lenders would make a seasoned cheetah blush when it comes to their speed and agility in revising and resetting mortgage rates on a quarterly basis -if it benefits them- whilst a borrower can only reset his rate annually (providing of course they actually notify the lender in time in most instances...bit of problem mind you complying with a deadline if you happen to live abroad). What this means is that a lender can take immediate advantage of a rise of interest rates (charging a borrower more from the get-go) whereas suspiciously they prove themselves to be obtusely slow to react to a decrease in interest rates (meaning they would earn less as you would be paying less in your monthly instalments) and of course it falls on the borrower to nudge them to reset the rate in their favour. That is why it is abusive, because –again– it is one-sided.

conair

Latest information from solbank is that the floor limits on mortgages have not been deemed illegal in any court.
Does anybody know different.
Any info much apprecaited.
Thanks

fifi

Page three in the Adicae magazine seems to be giving an up to date account of how the cases are going. http://www.afectadosclausulasuelo.org/archivos/Periodico-Boletin_ESPECIAL_CLAUSULAS_SUELO_2012.pdf

I dont know how to do an online translation with a PDF file.

Perhaps someone else can translate it.

Lostboys

Translation:

The judicial process is continuing even though the banks are dragging their feet.
The banks know that we are taking legal action against them.  With regards to this, the first people affected have received a call from their bank to try to come to an "agreement".  If this is your case, be careful.  Don´t sign anything before contacting ADICAE with the proposal.

Paddster

I love and appreciate all the tips and advice you put on ere Fi,if i ever manage to buy somewhere over there in the future you're the first person i'm coming to..Great stuff and really helpful.....
Regards,Paddy..... :) :)

fifi

Thanks Paddster and Lostboys for the translation. :)

Is there a way of doing  translations of a large PDF file with an online translator?

TamaraEnLaPlaya


fifi

Thanks Tamara, I have just tried Translator toolkit, but without any success. I will play around with it tomorrow again and see what I am doing wrong. Perhaps the file size is too big or something?

Will let you know if I manage it. :)