The Congress of Deputies has approved the new mortgage law. The one that seems that it can be the last great reform of the legislature arrives with 3 years of delay. And this month has been processed in large part by the pressure of the European Union, which threatened to impose a fine of more than 100,000 euros a day to Spain if it did not take forward the new law. If not, surely it would have been delayed even more.
Basically, some issues are reformed to further protect the client. But what are the keys of the new Law?
The first big change is that it makes it difficult for banks to seize the client for non-payment. Instead of having to stop paying three installments as dictated by the law so far, the client will not have to pay at least 12 months to start the expropriation of the home.
The mortgage market is probably one of the ones that most directly impacts consumers
All the expenses, except for the appraisal, will be assumed by the financial entities. It stands out that, from the entry into force of the law, the banks will pay for agency, notary and registration. They will also have to assume the ‘famous’ Tax of Documented Legal Acts (IAJD), which so bad image left the Supreme Court a few months ago.
Another great measure is that the law prohibits floor clauses. This means that in operations with a variable interest rate, no limit can be set for the interest rate reduction. It is a measure that has been denounced by all consumer organizations for many years and is finally reflected officially.
What will happen with the new law
With the new law, the granting of the mortgage can not be linked to the contracting of bank products such as insurance or credit cards. This measure is somewhat cheating, because it does accept that ‘bonuses’ are included in the loans depending on the products that are acquired. Although it will be seen in the coming months how this part of the new regulation affects, it gives the feeling that it is the ‘same dog with a different collar’ and that the only thing that changes is the name.
The mortgage law also lowers the cancellation fees and the notarial and registration fees. Conversion fees can not exceed 0.25% of the outstanding capital. And from the third year directly they are deleted. This measure facilitates the change from a variable mortgage to a fixed one through greater competitiveness among banks.
All these measures at the end contribute coherence in an issue as important for the bulk of citizens as is the purchase of a house financed with a mortgage loan. But of course they are not ‘revolutionary’ measures and may be a bit ‘short’. You just have to see that the right parties have voted in favor and leftist parties like Podemos or Esquerra Republicana de Catalunya against. Be that as it may, the new regulations are an important step to improve the rights of the mortgaged.