The panel of judges in the province of Murcia has ruled in favour of an immediate suspension of court processes commenced by banks.
The public auction of properties will therefore not take place, until the European Court rules in relation to abusive clauses contained in mortgages issued by Spanish banks.
Under particular scrutiny is the “clausula de vencimiento anticipado” (whereby the bank can claim the entire debt at any stage), which is included in the majority of mortgages.
The ruling comes in a period when the banks are under heavy consumer and political pressure in relation to various historic trading practices; namely the insertion of floor clauses in mortgages, the high set up costs of mortgages and block selling of insurance premiums.
Over the past 3 -4 years the banks have experienced a huge number of mortgage defaults from both resident homeowners and foreign second homeowners.
This led to a large number of borrowers seeking a settlement or dacion en pago with the banks. It was always far simpler for the banks to chase Spanish nationals than overseas clients.
The repossession and ultimately auctioning of the property is a long and drawn out affair. The law enables the bank to auction the property for a sum of 50% of the valuation of the property as stated in the original mortgage deed.
The ongoing issues surrounding various types of abusive clauses in mortgages offered by the majority of the Spanish banks has led to the ruling that has ceased all ongoing action.
This is potentially good news for property owners seeking to reach an amicable agreement with the mortgage lender to return the property and cancel the mortgage.
GB Abogados are well versed in assisting clients with their mortgage in Spain. If you have a mortgage with a Spanish lender and would like to discuss your situation and options, please do not hesitate to contact us.
We provide a no obligation consultation when we will discuss your circumstances and provide our advice as to the best course of action.
Whilst we are reviewing your situation, we will also assess whether your mortgage contains any abusive clauses that potentially can be pursued for compensation.
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