The Mortgage Floor Clause, better known as the Clausula Suelos, is essentially a limitation on your annual percentage rate. Even if your interest value has decreased, you may still be unable to benefit from this because of the entrenched clause. Supposedly, many Spanish Banks are incapable of reducing the minimum repayment level for consumers, and as a result of this, they continue to still unlawfully overcharge their customers. With this in place, banks can ensure that Spanish mortgage owners still make ongoing, over-priced monthly costs, paying up to 3-4% more money than what they legally owe. So, if you feel you have entered a Clausula Suelos mortgage in Spain, you could be entitled to a huge amount of compensation.
Reclaim part of, or all of your initial payments with the assistance of a trusted team member here at Sarah Waddington Solicitors. With a wealth of knowledge in the soliciting sector, we obtain ultimate jurisdiction over legal matters regarding intricate Clausula Suelos disputes, producing maximal levels of success rates for every client. Offering a first-class service that solely aims to resolve all your legal matters, we work closely with all clients to gain a full understanding of their individual requirements and specific details of their dispute. Our representatives will exceed all of your expectations, defending your case for the money you are due back.
What is a Floor Clause?
The floor clause is a legal agreement, which is found within many Spanish mortgages and is deemed to be unlawful to consumers. In short, Spanish banks are legally responsible to reduce the minimum repayment level even when the interests of that rate fell below that figure. However, many people with mortgages in Spain are inclined to be paying an increased cost for each monthly payment. In addition, it is considerable to mention that financiers are required to explain the terms of the mortgage contract to customers. They should clearly outline the floor clause within the contract, as well as explaining the financial consequences it can have.
European Borrowing Rate and The Floor Clause
An example of a floor clause which had a dramatic impact on mortgages was the Euribor, which abbreviates the meaning of the Euro Interbank Offered Rate based on the average interest rates of European banks. Within the terms of the clause, many Spanish tracker mortgages were directly correlated to a variable interest value, such as the European Borrowing Rate (Euribor). A large number of these mortgages were involved in a Floor Clause, meaning that even if the official rate of interest had dropped to a lower figure, customer’s mortgages would remain at a minimum rate due to the clause.
The Legality of The Floor Clause
The determined turning point for the Clausula Suelos took place in May 2013, where the Spanish Supreme Court ruled that mortgages of this type, provided by BBVA, Cajamar and NCG were “abusive”, but banks were not initially ordered to refund customers. After many years of controversial debates regarding the no immediate refund policy action had to be taken. Therefore, in April 2016, a Madrid judge declared that 40 of Spain’s biggest lenders had to reimburse borrowers the extra interest paid on mortgages dating back to 2013.
As the most recent ruling in December 2016, the European Court of Justice ordered that there should not be a time limit on how far back you can claim the initial charges and banks should pay back all of the interest you overpaid.
How Much Compensation Could I Receive?
Many people aren’t aware that they are involved in a Floor Clause, let alone being able to claim back compensation. This is where the help and guidance from professionals like us can assist your case, enabling the ability to legally and officially gain back the money you rightfully deserve. To identify a Floor Clause within an agreement, we recommend re-reading your mortgage deed, however, to completely classify the Clausula Suelos, our solicitors will locate this for you.
To confirm your nullification, we will represent your dispute on your behalf in order to effectively help you re-claim the wrongly charged interest you overpaid which goes back to 2008 in many cases. For mortgages as high as €150,000, the losses could be €200 or more per month, meaning that claims could be in height of €20,000.
What to Do If You Believe You Are Tied into A Spanish Floor Clause?
To reclaim full confidence within your mortgage, contact Sarah Waddington Solicitors to confirm that you will receive partial or full repayment for the money you have been over charged. We will carefully review your mortgage deed free of charge, advise you on what you are legally able to claim and approximately how much compensation you could be given. If you feel you are in need of specialist guidance to indicate and confirm that you have been affected by the mortgage clauses, we’ll immediately identify the cause of your legal settlements, potentially recovering your equitable compensation.