Floor-clause claims overloading courts

SPAIN’S judicial system simply cannot cope with the hundreds of thousands of Clausula Suelo (floor clause) cases being brought before the courts.

Despite 54 specialised courts being set up across Spain, with at least one in every province, the sheer onslaught of cases is proving overwhelming.

Some 260,000 cases have been filed so far, but only just under 52,000 have been concluded, which is a mere 20%.

Many victims claim they have waited up to a year for their banks to admit they have a case. And the situation isn’t helped by the banks themselves, which appear to be challenging every ruling, despite losing 97% of cases.

Lenders are creating a second bottleneck of appeal cases which is “unjustifiably hobbling the system with an artificial litigiousness, that could easily be avoided, and which is consuming huge amounts of public resources,” according to Miguel Pasqual de Riquelme, head of Murcia’s High Court.

As thousands of families continue to seek justice, it is important to remember how they found themselves locked into dodgy mortgage contracts.

Floor clauses, which were often written in secretly, imposed a minimum-interest rate on floating-rate mortgages, by setting a limit on how far they could fall, in tandem with the benchmark rate.

In practice, this meant that Spanish mortgage-buyers did not profit fully, from the record-low interest rates enjoyed by Spain for several years.

The clauses were ruled illegal by the Spanish high court in 2013. But it has taken some families up to 10 years to get their money back, or even get their case admitted to court.

But if you want to avoid such situations, the answer is simple: hire a mortgage broker!

The Finance Bureau, which has established links with the biggest lenders, acts as a go-between for the client and the bank. But, crucially, the broker, who is not connected to the bank, works to find the buyer the best deal available.

Brokers also highlight any hidden fees, or compulsory add-ons, tucked away in the small print, because it is important to know exactly what is attached to your mortgage.

When it comes to selecting a mortgage, you have one shot to get it right, literally. But hiring a broker, when necessary, is a small price to pay for peace of mind, and a fair contract, which is totally legal.


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Posted by on Nov 16 2018. Filed under Local News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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