Main novelties of the new mortgage law T
he new mortgage law, which had its first working day in force last Monday the 17th of June, 2019,
aſter several years of negotiation. Tis new regulation increases the protection of the consumers, as it is required by the bank entities to assume the costs of notary, agency and registration, which will allow customers to save an average of between 500 and 1000 euros, among other news. Te Congress gave green light in February to the Regulatory Law of the Real Estate Credit Contracts, better known as Mortgage Act. Tis new law is the result of the transposition of a Community Directive which has a delay of almost three years, reason why the European Commission threatened Spain with a fine of more than 100.000 euros a day. Among the most outstanding novelties, the text establishes that from now on it will be the banks and not the clients who will have to take charge of the payment of the first copies of the notary, the expenses of the registry and those of the agency; there will be a reduction of the interests on arrears and early redemption; and they increase the non-paid months before a credit is executed.
RIGHTS Floor clauses are removed and there is more protection against eviction Te regulation also eliminates floor clauses. Te dation in payment will be voluntary and will only be applied if the parties establish it. Another novelty is that the beginning of the eviction procedure is hardened. For a bank entity to exercise its right to early maturity, unpaid installment must exceed 3% of the granted capital or 12 monthly installments if it occurs in the first half of a loan, and 7% of the granted capital or 15 monthly installments if it occurs during the second half. Additionally, it is required that the lender has requested the pending payment to the borrower, granting him, at least, one month to comply.
INTERESTS Limits on prepayment commissions on fixed and variable rates On the other hand, the maximum commission to be applied by a bank to a client will be limited for the first time in case the second decides to repay part or all of the debt of a fixed rate loan in advance. So far, only the advance reimbursements in variable rate loans were regulated, whose commissions, which were already established by law, will be reduced.
16 / PROPERTYMAIL
ENTITIES More communication with notaries and more training in banks Aſter the certification of the suitability of the advice, the entities must transfer the conditions that they offer to the interested parties to the technological platform of the notaries so that the public notaries can inform their clients in a personalized and detailed manner and without the presence of bank representatives. Te notaries must inform the clients free of charge about the conditions and precise clauses of the mortgage loan offered by the bank within 10 days, perform a comprehension test to the citizen and reflect that information in a notarial deed, also without any cost. Hence, if you´re interested in taking out a mortgage loan, you will have greater protection and transparency with this new law.
For more information, please contact Premier Law
info@premierlaw.net
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