Finally some justice from the European courts for Spanish mortgage holders.
The banks who included the abusive “Floor Clause” in their mortgage products will now have to repay any excess money paid by the mortgage holder when the Euribor rate dropped lower than the “Floor Clause.”
Previously the Spanish banks were told that the floor clause was illegal and they should no longer apply it to products from May 2013, many banks stopped charging the additional interest rates following the supreme courts decision but they did not re pay the additional amounts charged when the Euribor rate dropped lower than the “Floor Cause” as the courts did not order this at that time.
The “Floor Clause” meant that if a mortgage holder signed up for a mortgage for example of Euribor rate plus 1% but the product included a floor clause of 4%, then even if the Euribor rate dropped to lower than 3% the mortgage holder would still pay 4% instead of the actual Euribor rate plus 1%.
The recent ruling from the European courts means that Spanish banks could be asked to repay approximately 4 billion euros to mortgage holders. The banks that mainly included the floor clause are Cajamar, Popular, BBVA and Santander. The banks will not voluntarily refund a mortgage holder of all the excess interest paid over the term of the mortgage so far, this has to be requested by the mortgage holder, more than likely the use of a lawyer to give the banks a friendly nudge may be required to avoid the “mañana” situation from occurring. Whilst this is an expense of a few hundred €’s when you consider that an average mortgage holder of a 20 year mortgage for 125,000€ taken out in 2002 with a Euribor +1% deal but also a 4% Floor clause will have overpaid approximately 25,000€ from 2008 to December 2013 (when many banks voluntarily stopped applying the Floor Clause), then it will be money well spent. You can request a cash refund or a reduction in capital.
It is time to claim what is yours and request repayments from your banks. If you had a floor clause and would like a refund, we at the newspaper have negotiated favourable rates with lawyers who already have a proven track record in removing the floor clause and getting refunds so contact Fay on firstname.lastname@example.org to see if it is worth while pursuing a refund.
Please note that in order to request a refund, a copy of the original mortgage deed is needed, if you have misplaced this you can get a copy from the notary where you signed for the mortgage.
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