Do you need help in order to claim the nullity of your “floor clause” as well as the refund of the interests overpaid on your mortgage loan?

 For those readers who might have a mortgage in Spain at the moment, this article will surely be of great interest to you.

As you might probably know, The Spanish Supreme Court has recently ruled that the “Interest rate floor clause” can be abusive if the client/consumer might not have been duly informed about it, in a clear and comprehensive way, before signing the mortgage deed at the Notary.

This specific unfair clause imposes a limit on the extent to which consumers can benefit from lower borrowing costs, should the reference index used to set mortgage rates fall — in Spain the one-year Euribor interbank rate is usually used. (for instance 3,25%)

Earlier in June 2013, the Supreme Court clarified a judgment delivered in May declaring floor clauses null and void if they breach the levels of transparency demanded by the European Consumer Directive. The clarification stated that within the context of a mortgage contract, the infringement of the indicated criteria was sufficient grounds for these clauses to be completely nullified.

Moreover, the clients would be entitled to claim the extra interests unduly charged by the bank in question.

Nevertheless, greedy Banks might still try to play you for a fool, by using all kind of dirty tricks aimed to keep earning even more money from you, despite the removal of the abusive floor clause.

For instance, some savings Banks have recently provided clear instructions to its staff as to convince those clients who claim the removal of the mentioned clause, to change the mortgage loan, into a highly disadvantageous fixed rate type or alternatively by maintaining the variable interest type, but with a higher differential rate or even with other hidden defective mortgage modifications.

On the other hand, some banks will also use dubious blackmail tactics. For example, they will readily accept the removal of the abusive clause, but in exchange of forcing the client to hire some additional financial products, like House or life Insurance, risky financial products, etc.

Finally, another commonly used trick consists of offering the client, the accumulation of all the debts in one new mortgage loan, also called reunification of loans. Beware! Apparently, the monthly quote might seem more attractive to you, but in reality, be very careful, because you might end up paying to the Bank much more costs and expenses, with higher interests and for longer period of time!!

Therefore, should you be personally affected by this serious problem, as a preliminary step, we suggest that you kindly ask your bank to remove immediately the floor clause from the mortgage Deed but with no condition at all. Remember, that even if you might be national from another country, you have the same rights as a Spanish consumer!

Secondly, do not sign any new novation agreement with the bank without consulting with an expert law firm, like “Ricor Abogados”. On the other hand, if the bank might stubbornly refuse to remove the floor clause, please do not hesitate to contact us for further advice.

Considering that according to experts, the Euribor is likely to increase within the next 2 years, time is of the essence, as failing to take speedy legal action now, might involve losing more tan 3.000 euros later on!!

Subsequently, if you might finally decide at the worst scenario, to sue your bank, bear in mind that the sooner the better!

I do hope this information is useful for you and should you have any question or enquiry, please do not hesitate to visit our website www.englishsolicitorinspain.com or www.ricorabogados.com and we’ll be delighted to assist.

Thank you very much for your attention and we look forward to helping you!

Mr. Ricor

Solicitor

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