The Government has finalized its mortgage reform. After two royal decrees and a sentence from the Court of Justice of the European Union (CJEU), the Popular group in Parliament presented its amendments to the draft of the Law that regulates the assignment in payment, the standstill of evictions and the social rental. And there are important novelties, in order to make it more difficult for banks to expel those in risk of social exclusion from their homes.
Nevertheless, the retroactive assignment in payment will not be generalized, as demanded by the Popular Legislative Initiative (PLI). “The assignment in payment will only limit itself to the Code of Best Practices of banks, and only as a last resort”, governmental sources declare. That is, for families with an annual income below 25.300 Euros and with special social circumstances who might have tried to restructure their debt, without any success, as established by the said code.
The amendments of the PP reinforce the out-of-court eviction process. Up to now, only the creditor could request this process. Now the debtor will also be able to request that the notary decides on this matter.
Prior to this law, it was not possible to claim the paralyzation of the eviction due to the existence of abusive clauses in the mortgage. Neither this is possible. And the notary can suspend the out-of-court sale when it can be proved that an abusive clause has been claimed before the judge.
These measures comply with all matters requested by the CJEU.
The amendments of the PP establish that “whenever a court estimates that some of the clauses could be abusive, it will hear both parties in the next five days. Once they have been heard, it will decide in the next five days”.
It would either paralyze the eviction “or an indemnity would be agreed”, as assured by sources from the Ministry of Economy. For example, the judge could take these clauses into account when calculating the pending debt (by deducting from the debt the abusive late payment interests that had already been paid).
Up to now the mortgage debtor was not able to claim that the clauses were abusive until the process had finished.
The proposal of the PP also increases the cases in which families can benefit from an automatic paralyzation of the eviction for two years. Those handicapped debtors, or with an illness that makes them unfit for work, in a situation of dependence or with handicapped children will have an income limit of 25.300 Euros instead of 19.000 (the rest) and 16.000 (the current limit).
The Government has established that one non-payment is not enough to start the eviction process, three will be necessary. This change, considered “very important” by the Government should prevent the flow of evictions on families that cannot face the mortgage on their home.
Late payment interest rates will also be limited to 12% (three times the legal interest of money). And this not only on the accrued interest, but also on the non-paid one. It will therefore have a retroactive effect. This will alleviate all those affected.
Conclusion: “With these amendments there will be no further cases similar to the one that originated the sentence of the European Court”, governmental sources declare.