The Government approved this Friday the Council of Ministers Bill Real Estate Credit, which states that banks can not determine the early maturity of a mortgage until the default by the consumer assumes 2% of the loan, including interest, or reach nine installments during the first half of the contract.
As for the second half of the contract, the limit is set at 4% of the loan or twelve monthly payments. In this way, the Government establishes a threshold from which the bank can decree the early expiration of a loan and execute the mortgage since with the current system it is possible to overcome the loan early from the third month of default.
As reported by the Ministry of Economy, Industry, and competitiveness in a statement, the rule has a “broad political consensus” and from now on the parliamentary process for approval begins. Specifically, the Government has agreed on the bill with Citizens, the PNV and the Canarian groups (Coalición Canaria and Nueva Canarias).
“Formally we have no consensus with the PSOE, but we are open, in the process of processing, to the contributions they could make,” said the Minister of Economy, Industry, and Competitiveness, Luis de Guindos, during the press conference after the Council of Ministers.
This rule should have been approved before March 2016, as established by the European authorities, but has been delayed by the situation of the government in last year’s functions and tensions with Catalonia, explained the head of the Executive’s economic portfolio.
The draft of the new mortgage law also establishes
that the default interest will be, at most, three times the legal interest of the money in force throughout the period in which they are due and will be applied to the outstanding principal.
In addition, the bill aims to facilitate the conversion of the mortgage loan in foreign currency to another currency, as well as the change of mortgage loan with variable interest to fixed interest. In this last case, the maximum commission for early repayment for a novation or change of entity in which a fixed rate is agreed will be 0.25% in the first three years and thereafter it will disappear.
On the other hand, in the case of mortgages at a variable rate, the commission for early repayment will be zero as of the fifth or third year of the contrary, depending on the agreement. In the case that it is five years, the limit will be 0.25% of the capital paid in advance, while if it is agreed for three years, it will be limited to 0.5%.
As for fixed-rate loans, the early repayment fee will be 4% maximum in the first ten years and 3% thereafter. Thus, it is considered that the risk is greater for the bank in the case of a fixed rate loan than in the case of a variable rate loan.
The percentage of the commission for early repayment will always be applied to the amortized capital, as explained by Ministry sources at the time of presentation of the bill and clarified that, in any case, the compensation to the entity may not exceed its financial loss.
On the other hand, the standard includes the possibility for both parties to voluntarily adhere to a standard contract in which the fundamental clauses of the contract are established. This reform applies to all natural persons, that is, those who carry out business activities, such as the self-employed, are included.
The new norm will demand that the intervenors in the granting of a mortgage credit have a professionalization and a training to offer all the information required to the consumer and evaluate their solvency situation while prohibiting the banks from offering incentives to their workers for the granting of a certain number of contracts.
Thus, “the solvency of the debtor is sought and that is more quality than the number of mortgages sold”, explained the minister, referring to the “problems” of 15 years ago with the granting of mortgages, many of which ” They ended up in an eviction situation. ”
BINDING SALES ARE PROHIBITED
On the other hand, it is prohibited to offer the linked sale of products with mortgages, as in the case of home insurance, except for exceptions authorized by the Bank of Spain or if it is proven that they benefit the consumer. That is, operations in which it is only possible to contract the mortgage loan if it is done together with a series of products are not allowed.
However, combined sales are allowed, which are those in which the consumer has the option to contract the mortgage loan separately or with a set of products. In this case, the entity is obliged to submit two budgets, one that includes the products that are marketed with the mortgage and another without them.
LIST WITH SENSITIVE CLAUSES
In addition, when signing a mortgage loan, the consumer must receive seven days in advance of the date of signature of the contract by the bank not only a standardized information sheet with the main characteristics of the contract, but also another Standardized with warnings in which sensitive clauses are included, such as floor clauses.
This file should include estimates with different scenarios of variable interest rates, a copy of the contract and disaggregated information on which part should pay each mortgage expense. The rule does not establish to whom each expense corresponds, but both parties must agree to it.
In these seven days, the consumer must go to the notary of his choice, who will verify that he has been given all the mandatory information and that has been done in time while answering all the questions he asks and will explain the sensitive clauses of the contract. The borrower must sign a notarial deed, which will be free for the borrower, in which he shows that he knows all the necessary information.
Later, the consumer will go with the bank to sign the contract before a notary and both the registrar and the registrar can not authorize the signing of the deed if all the obligations are not fulfilled or if the contract has clauses considered abusive by final judgments.