The current mortgage mess in Spain
A dynamic, growing mess in mortgage Law and enforcements exist in Spain at present. Most interesting.
Possibly (1) the fact that Spain was a great place to real estate investment in Europe when euro was born and American subprime mortgages were flying infecting the globe plus (2) the lack of regulation by our financial guardians at the time. The fact is that the whole experience related to property investment in Spain since Euro came, from publicity standards to contracts of the off plan units through the posterior mortgages, has been a crazy mess, a lesson for history, I hope.
As lawyers we have been witness of the entire experience through the lives of our clients.
We sawhow developers breached the off plan contract and refused to admit, then when witnessed at first row, when they had to refund due to Judges requesting them to do it with no fruit to our clients due to the cascade of bankruptcies of these developers. We also have full records from minute one, as pioneers and main promoters, of the success of redirecting those claims against related Banks and Insurance companies.
What are we seeing now?
The story is not finished, I would say it is just at the middle of it, as the fight regarding contracts and guarantees is almost conquered but the new fight on mortgages is vibrantly alive.
We are seeinghundreds and hundreds of relieved victims-- both foreign and national: there is no nationality when being the victim of financial unsanity---, getting their fair refunds with all interests from day one from Banks and Insurers.
We are also seeing the tears and laments of those who, pressed by agents, developers and their very same lawyers, completed on off plan properties and acquired developer´s mortgages in a hyper inflated market before the threat of losing their life- earned investments. We are seeing how they have their lives captured on non-real, bubble created property purchases.
The good news if any? Yes, of course
Good news is that because of our belonging to the European Union, main bodies of this, Commission and European Court are placing some order in the current mortgage scenario of our now international Spain, which luckily is not subjected to old interests of one or other but under higher instances who can help us to achieve the balance and professionalism that the finance market of a civilized country demands.
It was Floor clauses, then claims on expenses related to mortgages and illegals interests index like IRPH, and it is now a deeper battle on two more important abusive clauses in my opinion.
These two clauses are (1) Anticipatedmaturity of mortgage contracts and (2) Renounce to being informed of cession of debt to third parties: clauses which were created by the financial monster and included for its sole protection and benefit in every deranged mortgage contract of those times
Both clauses allows the business of the vulture funds to arrive and grow and both are being under examination by Europe
What is Europe revising?
Next week, it starts in the European Court the to decide on the matter that the Spanish Supreme Court submitted to it: what do Judges need to do when facing a mortgage contract which allows a bank to request full debt to the debtors after a 2-3-4 months default. Till this is decided, all mortgage enforcements are currently paralyzed in Spain Courts.
There is also a current claim before the European Commission on the unfair mechanisms of cession of mortgage debts to vulture funds as the current scenario makes very difficult for mortgage debtors to have the benefits that Spain Law (provision 1535 of Civil Code) provide for them, by allowing them to buy the debt once it is being reduced to be sold to vulture funds.
Most interesting scenariofor a more balanced, person-centered financial system in Europe.