In "attention to the exceptional circumstances facing our country, motivated by the economic and financial crisis, in which many people who hired a mortgage loan to purchase their primary residence have difficulties to meet their obligations" Act 1/2013 has just been published
This Act, contains four chapters.
Chapter I (Suspension of repossessions) : provides immediate suspension for a period of two years for evictions of families who are in a particular risk of exclusion.
We estimate as families in such a situation those:
a) Single-parent families with two dependent children, families with a child less than three years old or a disabled or dependent member, or families in which the mortgagor is unemployed and has exhausted the social benefits or, finally, the victims of domestic violence.
b) Whose income does not exceed three times the Public Indicator of Multiple Effect Income.
This limit rises on households in which a member is disabled or dependent or residing with disabled or dependent persons.
It is also necessary that in the four years preceding the time of the application, the family unit has undergone a significant alteration of their economic circumstances,in terms of effort to access to housing. This significant alteration of their economic circumstances is measured based on the change of the mortgage burden in the income suffered in the last four years.
This measure, exceptionally and temporarily, will affect any prosecution of foreclosure or extrajudicial sale.
In these cases, the Law, without altering the foreclosure process prevents the eviction.
Finally, the inclusion in the scope of application goes through the fulfillment of other requirements, among which we can highlight that the resulting mortgage payment exceeds 50 percent of the net income received by all the members of the family unit, or it is a question of a loan or mortgage loan secured only falling upon the only owned debtor's home and granted for the acquisition of it.
For these particularly vulnerable debtors, the debt will not accrue more delay interest than the result of adding to the compensatory interests two percent on outstanding debt.
Chapter II on Measures to improve the mortgage market:
Especially relevant is the fact that, for mortgages on first residence, default interest will be limited to three times the legal interest.
It also explicitly prohibits capitalization of these interests and provides that in case that the result of the repossession is insufficient to cover the entire secured debt, this result will be applied to delay interests, so that it is allowed, in a big extent, that the principal amount stops accruing interest.
In the extrajudicial sale of mortgaged properties, law introduces the possibility that the notary can suspend it when the parties can prove that it has been requested to the competent court, as provided by Article 129 of the Mortgage Law, to issue resolution decreeing inappropriateness of such sale, because of the existence of abusive clauses in the mortgage loan or its continuation without the application of the abusive clauses. Furthermore, it expressly empowers the notary to advise the parties on abusive clauses .These amendments are adopted as a result of the judgment of the Court of Justice of the European Union of 14 March 2013
On the other hand, it is strengthened the independence of valuation companies from credit institutions. And legal valuations made by the client need to be accepted by the Bank under strong sanctions.
Chapter III on Modification of the foreclosure procedure :
These modifications are intended to ensure that foreclosure is done so that the rights and interests of the mortgagor are adequately protected and, overall, a speedier and more flexible enforcement proceeding is done.
In particular, as a measure of great importance, it is established the possibility that if after an usual home foreclosure it still remains an outstanding debt ,during the subsequent moeny enforcement proceedings part of the payment of the remaining debt will be canceled , provided that certain payment obligations are fulfilled.
In addition, the debtor is allowed to participate in the potential future appreciation of the executed house.
On the other hand, it facilitates access of bidders to auctions and the requirements imposed on them are reduced, so that, for example, it decreases the necessary guarantee to bid from 20 to 5 per cent of the appraised value of goods.
Also it doubles, in the same sense, the period to consign the price of the award for the bidder of an auction.
Certain improvements in the auction procedure are introduced , establishing that the appraised value for it will not be less than 75 percent of the appraised value that was used to grant the loan. Previously there was no limit to the type of auction. In addition, in the event that the auction ended without any bidder, the percentage of the allocation of the property increases. Specifically, it would rise from 60 per cent to a maximum of 70 percent, always for cases of residence.
This Chapter also includes the modification of the enforcement proceedings to the effect that, on its own initiative or upon request, the competent court canappreciate the existence of abusive clauses in the enforcement order and, therefore, it declares the invalidity of the execution or , in its case , its continuation without application of those clauses estimated abusive.
Chapter IV . It offers different solutions against foreclosure to those under exclusion risk and meeting certain requisites.
Retroactivity: For repossession procedures already started, this Law will be applied just to those enforcement acts still to be perfomed
Setenil de la Sierra, Cadiz, South western Spain