Even if you mortgage has been paid of
Is an arrangement in which the maximum limit (ceiling or cap) and/or the minimum limit (floor) in a loan is fixed.
In theory is a financial service that is tagged onto your loan whereby if the interest rate to which the loan is referred to (normally Euribor plus a spread) exceeds a capped amount you are charged only the capped amount (ceiling) saving yourself considerable money i.e. the official interest rate reaches 10% and your collar clause has a ‘ceiling’ set at 7%. You save yourself paying the difference (3%) on hiring this financial service.
Conversely should the interest rate fall too low you are likewise charged a capped amount (floor or ‘suelo’ in Spanish).
Collar clauses clearly fall in the category of an abusive clause for the reasons I explain below.
The Supreme Court Sentence 705/2015 dated 23 December 2015 declared abusive the following clause in which BBVA imposed on the borrower the payment of all expenses, taxes and commissions associated with the mortgage loan:
Have any banks now changed their clauses relating to mortgage opening fees?
Yes, BBVA, Santander, Bankia, CaixaBank, Sabadell & Ibercaja have all changed their clauses relating to mortgage opening fees. By doing this they hope to avoid future claims on new mortgages. However, this does not prevent consumers claiming refunds for mortgages signed in the past with these banks.
What documents are required to make the claim and file a Lawsuit?
The mortgage deed, the notary’s invoice, the land registrar’s invoice and the tax form documenting payment of the AJD duty (form 600)
2. After two months from the complaint, if the Bank Customer Service Department has not replied or if its answer has been negative, it will be necessary to file a Lawsuit against the Bank.
If legal action is required, what will be claimed in the Lawsuit?
The Lawsuit will request the declaration of the clause as null and void due to being abusive and the refund of expenses paid as a result of that agreement, which must be perfectly documented with their corresponding invoices. To file a Lawsuit it is necessary to instruct a Lawyer who in turn will instruct a Barrister & Procurator on your behalf.
What expenses, taxes and commissions can be claimed?
* Notary costs
* Mortgage Land Registry costs
* Registration costs (Gestoría) expenses (the company that ensures the property and the mortgage are correctly registered in the land registry – but only if the gestoría was imposed by the bank)
* Property Valuation costs
* Attached abusive insurance costs (Life insurance, Mortgage repayment Insurance)
* Commissions on lack of payments
* Mortgage cancellation costs and commissions
* Any judicial or extrajudicial cost which has been charged automatically on the consumer, not following the perceptive rules of the Civil Procedure Act.
Mortgage set up fees normally represent between 2.5% and 3% of the mortgage value.
Some Judges are ordering a refund of notary, mortgage land registry and gestoría fees, but not the Stamp Duty (AJD or Documented Legal Acts Tax), which in fact represents around 75% of the associated expenses when taking out a mortgage.
Of course there is no refund for Property conveyancing costs and Property Conveyance Tax which must always be paid by the home buyer.