Tag: mortgage

The citizens will be able to stop their eviction until the judge decides.

The Court of Justice of the EU (CJEU) decided yesterday that the Spanish legislation on evictions is against the European regulations as it does not allow citizens to stop their eviction based on an abusive clause, as it is a right the consumer can only exercise once he has been expelled from his home. The Spanish Government had put aside the Decree on evictions which was being prepared by Parliament while awaiting a decision, and yesterday it hastily declared it will reform the Civil Procedure Law, as required by the court.

The court (…) understands that the protection at a later stage “is incomplete and insufficient” as “it does not give the chance to avoid the final loss of the home” and only “provides an indemnity for damages”.

The consequences of this decision are to be applied immediately. According to European judicial sources, the decision “obliges Spanish and European judges to stop the eviction while it is determined if the contract signed between the professional and the client has abusive clauses”. Other sources close to banks declare that it is not an obligation but a possibility until the Government changes the law. When it does, “there will be more legal security, but the sentence is applicable directly”, European judicial sources declare.

This would affect all future foreclosures and those which are being carried out. For those who are already finished, there is no turning back. Although the judge José María Fernández Seijó, who set out the matter before the European court hinted yesterday that some of those affected by evictions could get their homes back.

According to figures from the Spanish Mortgage Association (SMA), there were more than 93.000 foreclosures in 2009 and 2010, which dropped to 78.000 in 2011 and were more than 70.000 last year. Half of these numbers could claim abusive clauses in future.

The sentence goes far beyond the conclusions of the General Attorney and establishes that the fact that the Spanish norms do not “allow the judge to adopt precautionary measures and among them, the suspension of the foreclosure” is directly against the European norms.

The Spanish Banks Association (SBA) and the Spanish Confederation of Savings Banks (SCSB) value this sentence positively. Nevertheless, Alfonso Garnica, from Iberia Abogados, points out that “the foreclosure is a mortgage guarantee which will complicate itself, causing an even bigger decrease in loans”.

Sources from the Ministry of Economy, assured that “the Government will adapt to the sentence”.(…)

Source: Expansión

BBVA pays 400 Euros per month to those clients that lose their homes.

BBVA helps those clients who lose their only home as a consequence of a legal procedure. The institution will offer an economic aid of 400 Euros per month for two years. This initiative will have a budget of 32 million Euros and will be carried out together with the Addeco Foundation.

This measure will benefit all families that lose their only home from the 1st January 2013 after a legal procedure started by BBVA. For those families considered especially vulnerable (high age or dependence, domestic violence, large families, handicapped people, among others), the economic aid will reach 400 Euros per month. Those families in need but with no special vulnerability that have lost their homes because of a lack of income, will receive 200 Euros per month during two years.

As well as granting a monthly economic aid, the bank will also provide other services such as orientation, training and help in the search for a job. If any member of these families finds a temporary job, the economic aid will be suspended, until his/her contract finishes. At that point the award of 400 Euros will start again and will continue until the agreed 24 months have expired.

BBVA has helped more than 160.000 families in need since the beginning of the crisis. Nine out of ten families that have experienced payment problems have been able to keep their credits up to date and keep their homes thanks to this policy, according to figures provided by the bank presided over by Francisco González.

The institution supports these families, instead of suspending the foreclosure processes of their homes, as they are obliged by law to initiate them.

The director of the institution for Spain and Portugal, Jaime Sáenz de Tejada, declared yesterday that the search of employment is the “most urgent need” for many Spanish citizens right now.

Source: Expansión

The Euribor consolidates its downward tendency while the ECB meets.

The Euribor at 12 months, the main rate used for the calculation of mortgages that have not a “minimum rate clause” in Spain, consolidates the downward tendency resumed in February, after a start of the year with constant increases.

With five values within the month of March, the Euribor reduces its monthly rate to 0,54%, which would mean a descent of 0,96% from March 2012. Plus, this rate has decreased 79 thousandth since the last meeting of the ECB on the 7th February.

The tendency during the month of February has been completely opposite to the one started in January. These last decreases have left the rate at the same levels as in December 2012.

This downward behavior takes place during the meeting of the Government Council of the European Central Bank (ECB), even though no changes on the official price of money are expected, which remains at a historic minimum of 0,75% since halfway last year.

Therefore, this downward tendency of the Euribor is not in line with the evolution of the interest rates, as no downward movements are expected for those.

It is expected that the institution presided over by Mario Draghi reduces its quarterly forecast of the GDP and the Consumer Price Index. (…)

Source: Expansión

The “harmful effects” of the assignment in payment.

Although there are many mortgaged families with difficulties to make ends meet who see the assignment in payment as the end of their hardship, there are many voices who alert of its danger. Yesterday the Foundation of Finance Studies (FEF) warned that the assignment in payment has “harmful effects” on the payment culture and causes the appearance of individuals that, “although they are solvent”, they get rid of the debt by endorsing the financial institution the downfall of the housing prices.

The Foundation proposes the development of other alternatives such as developing in Spain the norms of second opportunity, that is, an insolvency law especially adapted to individuals which “provides a quick, cheap and reasonable solution to insolvency”. The Foundation stresses that the lack of information “could result in a hasty legal reform” with negative consequences. It also points out that the number of mortgage loans is not available, nor is the number of evictions. “It could happen that the social problem is not well marked out”, it indicates.

The FEF thinks that the legal reforms should never be applied “with retrospective effects, except those which provide a clear technical improvement”. This is why they stand for going ahead with the reform while taking into account the payment expectations of the mortgage deeds and modifying as well the procedural process, as well as shortening the periods for any foreclosure process.

(…) Another strong bet of the Foundation would be to take adequate social measures against evictions with the financial sector sharing the costs “in proportion to the individual responsibility in the problem”

The conclusions of the Foundation are based on the idea that the Spanish mortgage market is suitable and has been able to meet the strong demand of homes of the last few years.

Source: ABC

The Government launches its social fund for properties: “It is not an excessive effort”.

She seemed Paulo Coelho in a tender day, but she was the vice-president of the Government of Spain. Soraya Saenz de Santamaría attracted all the interest in the mass signature of the agreement to create a social housing fund. The news were that banks were placing 6000 properties at the disposal of those evicted with rents between 150 and 400 Euros, but the vice-president trespassed the red line of sentimentality – which in politics is very fine – in a speech that arose so much astonishment that it overshadowed the family photograph of those signing the agreement.

In front of three ministers, the president of the Spanish Ferederation of Towns and Provinces, several bankers, representatives of the NGOs and some Secretaries of State, Saenz de Santamaría turned the signature of the agreement into a sentimental and paternalistic defense of the protective role of the Government. The vice-president even declared, with a trembling voice, that the Government had put itself “in the shoes of those which had risked for Spain” and had lost “what they loved more”. She was referring to the evicted.

With an even more sorrowful intonation, the number two in the Government stressed that “this agreement recognizes the right to fail, but no to lose one´s life”. That is, “the right to a second opportunity”. “It could happen to anyone of us”, she said.

Saenz de Santamaría left this compassionate tone behind only once. This was to warn that the 5891 properties banks have put at the disposal of the fund are not an excessive number, in comparison with the number of families that have lost their homes because of the non payment of their mortgage since January 2008. “It is not an excessive effort. I hope the financial institutions can excuse me”.

(…) The content of the agreement shifted to the background, but it can be summarized as rented homes destined to families with an income below 19000 Euros per year and with special social features (like, having children aged three or less).

The novelty of this agreement, advanced yesterday by Expansion, is that banks will not be able to choose which properties they allow to be rented, but they will have to release more properties in those areas with more foreclosures. According to the courts of First Instance, Catalonia, Madrid, Andalusia and Valencia are the autonomous regions where the amount is higher.

The town halls will play a leading role, as they will identify those families with a higher risk of social exclusion. (…)

Source: Expansión