COLLAR ON MORTGAGE VOID

 

Does anyone know any more about this?  Any further info much appreciated.

Ausbanc has campaigned for months against these minimum-interest clauses, noting that many banks hid them in their small print. They say banks billed them as protection against rising interest rates for mortgage holders and sold them to clients who did not understand the implications. The schemes protected mortgage holders by putting a maximum limit on the interest rate they would pay, but a floor when rates came back down. For thousands of mortgage holders it has meant mortgage payments remaining high even as interest rates are low.

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Wish they would do it in the UK...

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I would imagine this is a question for Maria to answer.

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What would AUSBANC say had rates instead been 10% over the last few years,  but the ceiling on the contract meant that mortgage holders only paid 7%?

There is no such thing as a free lunch.  Quid pro pro and all that.  Read the small print!

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I think the point is that Banks set a maximum rate of 20% and a minimum of 7%.  It was set so the change of ever exceeding the maximum were practically 0.

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If the terms were as ridiculous as you say then fair point.

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Hi

The clause you are referring to is called 'Cláusula Suelo' and was included in many Spanish mortgages.

What '198' says is correct.  Many Banks & Savings Banks included this clause in their mortgages in the following way:

For this example let us imagine the mortgage was taken out in 2006 when the Euribor was around 3.5%.  The bank would offer you the mortgage at a 'variable tracker' rate of Euribor + 1%.  So that would mean that initially you would pay interest of 4.5%.

The 'Cláusula Suelo' then included a floor limit or minimum rate of interest that could be charged of say 4.25% and an upper limit of say 11%.

During 2009 and 2010 the Euribor fell to around 1.5%.  So you would think at the rate of Euribor + 1% you would then pay interest of 2.5%.  But no - because at the time the Euribor went lower than 3.25% which was in early 2009 the floor limit or 'Cláusula Suelo' kicked in and your interest rate would be a minimum of 4.25%.

So you would never have the benefit of the low rate of the Euribor.

It is true what 'gerrycon' says - you also had the benefit of an upper limit above which your interest rate could not go..........but as '198' says the upper limit was always set at level at which the Banks thought could never be reached.

So the clause was very much in favour of the Banks and they have been reaping the benefits over the past 2 or 3 years.

Many people probably do not realise they have this clause in their Spanish mortgage.  It is worth checking.

You can use the template letter below to send to your bank to advise them to remove the 'Cláusula Suelo', recalculate the interest charged and credit you with the amount owed.

Maybe ask somebody who understands a little Spanish to help you and fill in the relevant parts of the letter below with your Banks name and the interest rate details etc.  You need to put the address of the Bank and the managers name at the top, fill in the date, enter the minimum rate of interest in the first paragraph where the red dots are, enter the name of your Bank in the 5th paragraph where it is marked in red, put your name and NIE number at the bottom, sign the letter and post it to your bank together with a copy of your latest mortgage statement (for ease of reference).

Good luck and let us know on this thread how you get on.

Kind regards

Keith

CARTA TIPO PARA SOLICITAR LA ELIMINACIÓN DE LA CLÁUSULA DE LÍMITE MÍNIMO DEL TIPO DE INTERÉS Y EL REINTEGRO DE LAS CANTIDADES INDEBIDAMENTE COBRADAS COMO CONSECUENCIA DE LA APLICACIÓN DE LA MISMA.

Banco/ Caja.............

Oficina.............

A/Att.

Sr. Director

                                                                                                           En..................., a........ de........... de 2011

 

Distinguido Sr. Director:

Me dirijo a usted como titular del préstamo/crédito en cuyo contrato la entidad ha incorporado una cláusula de límite mínimo a la variación del tipo de interés aplicable, estableciendo un interés nominal anual mínimo del .... por ciento. A efectos de facilitarles una completa y más rápida identificación, acompaño fotocopia de un recibo de dicho préstamo/crédito.

A este respecto, indicarles que la mencionada cláusula, coloquialmente conocida como “cláusula suelo”, comporta un desequilibrio contractual importante que desvirtúa la esencia misma del contrato de préstamo a interés variable suscrito, que no es otra que el tipo de interés varíe en función de las fluctuaciones del mercado conforme al índice pactado. Con la incorporación de esta cláusula a mi contrato, la variabilidad del tipo de interés pretendida desaparece para convertir al préstamo en la práctica en una operación a interés fijo y que, en todo caso, se utiliza para lograr un incremento artificial del tipo de interés ante las tendencias bajistas del mercado hipotecario, en perjuicio de mis intereses como consumidor y correlativa ganancia de esa entidad como prestamista.

Estas consideraciones, han sido recogidas por la reciente Sentencia del Juzgado de lo Mercantil Número Dos de Sevilla, declarando estas claúsulas suelo abusivas por aplicación del artículo 82 y siguientes del Texto Refundido de la Ley General para la Defensa de los Consumidores y Usuarios, aprobado por Real Decreto Legislativo 1/2007, de 16 de noviembre, y por tanto han sido sancionadas con la nulidad de pleno derecho, debiendo tenerse por no puestas en el contrato.

Los demandantes en dicha acción, representantes de Ausbanc, han solicitado al  Banco de España,  Confederación Española de Cajas de Ahorros (CECA) y  Asociación Española de Banca (AEB) que asuman la Sentencia y obliguen a las entidades financieras a abstenerse de incluir estas prácticas para evitar la presentación de más demandas.

Con anterioridad, el Pleno del Senado aprobó por unanimidad, en fecha 23 septiembre de 2009, una moción del Grupo Parlamentario Popular en la que se reclama al Gobierno la puesta en marcha de medidas que eviten el abuso de algunas entidades bancarias por la aplicación de estas cláusulas, habiéndose iniciado los mecanismos necesarios para ello. Por todo lo expuesto, y dado que lamentablemente el Banco/Caja.......... decidió incorporar en mi contrato de préstamo esta cláusula de límite mínimo de tipo de interés, por medio del presente escrito, LES REQUIERO:

PRIMERO.- La inmediata inaplicación de la cláusula de limitación mínima de la variación del tipo de interés de mi contrato de préstamo/crédito (cláusula suelo), al objeto de que la próxima cuota a satisfacer se calcule conforme al índice de referencia pactado, vigente a la fecha pactada, y con el margen diferencial pactado.

SEGUNDO.- El recálculo de las cuotas satisfechas en el préstamo, desde la fecha de la primera revisión hasta la última cuota abonada, aplicando el tipo de interés de referencia pactado en cada momento y el diferencial pactado. Acto seguido, procedan a abonar en mi cuenta (la misma en la que está domiciliado el abono del préstamo) el importe resultante de la diferencia entre la cantidad abonada por mí conforme a esa cláusula de límite mínimo de tipo de interés y la que realmente hubiera debido abonar sin esa barrera.

TERCERO.- Si pasados 30 días desde la recepción de la presente no obtengo respuesta en contrario por escrito suficientemente razonada, se entenderá que han aceptado la propuesta de inaplicación de la cláusula de suelo, lo que deberá reflejarse en el importe de la próxima cuota, y la devolución de las cantidades indebidamente cobradas que deberán hacerse efectivas sin demora en mi cuenta. En caso de denegarme la legítima petición que formulo a través del presente escrito, me reservo expresamente el ejercicio de las acciones extrajudiciales o judiciales que me correspondan, bien individualmente bien a través de las acciones colectivas que en su caso se ejerciten, y que conllevarán además la solicitud de una indemnización por los daños y perjuicios causados.

Sin otro particular, y a la espera de una respuesta por su parte que confío sea favorable a las pretensiones formuladas -en aras a resolver este contencioso por la vía amistosa, sin acudir a otras vías-, reciba un cordial saludo,

Nombre y domicilio                                                                       Recibido y conforme (sello de la entidad)

NIE  y firma

 

ANEXO:. Se deberá acompañar de fotocopia de un recibo del préstamo.

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Keith,

That is a excellent post.  Thanks a million for your informative reply.

I have done a bit more searing and I found the bank in the case BBVA have said they intend to appeal the decision but very significantly have stopped issuing mortgages with this clause.

I am with Banco Popular and have a collar at 5%.  I was never told of this when taking out the mortgage, the first I knew of it was after the first year when I expected the rate to fall from the then 6% to 2-3% but was told that although the mortgage is Libor +1 it will never be less than 5%.

 

Thanks again.

John

 

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 can anyone say if this applies to CAM mortgages?

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Many Spanish 'variable rate' mortgages included the 'Clausula Suelo' in the small print.  As I mentioned in my post below mortgage holders with this clause included have been unable to take advantage of the low Euribor rate over the past 3 years.

This as an abusive clause.

CAM probably issued mortgages with this clause included in the small print.  You need to check the interest rate you are currently being charged and see if the 'Clausula Suelo' is included in your mortgage terms & conditions.

A facebook group has been set up called:

Eliminación de la Cláusula Suelo de las Hipotecas

http://www.facebook.com/#!/pages/Eliminaci%C3%B3n-de-la-Cl%C3%A1usula-Suelo-de-las-Hipotecas/179037445445867

They say:

The 'Clausula Suelo' affects 29% of mortgages. The number of mortgages would hit 3,834,095 in 2008 and the profit earned by the entities would be around 7,000 million euros.

There is also this website:

http://afectadosclausulasuelo.org/

which is defending the rights of consumers with regards to the Clausula Suelo.

They state:

ADICAE is the only one that has been defending the rights of consumers in this issue for the past three years. We now have thousands of consumers who demand the removal of the clause and the repayment of amounts unduly paid to the bank or savings bank.

If you are affected by any of the 56 entities then ADICAE, has until Nov. 11 to deliver the full documentation provided in this website.

See the list of these 56 entities by clicking here: http://afectadosclausulasuelo.org/faq.php#pregunta_12

Kind regards

Keith

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 Yes, ADICAE is doing an excellent job. I do not know if they have english speaking assistants, but they should. Anyhow, I would not have any problem on transfering those documents of you to them and act as a liasion on this.

Tomorrow is a Feast day in Spain.

Kindest regards,

María

 

This message was last edited by mariadecastro on 31/10/2011.

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 CAM is not responding to requests to provide a copy of my Mortgage agreement  can someone advise what I should do? 

 

Allan Mackie 

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Clients ombudsman, should be the answer to this.

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 Thank you very much.  Would this be the Ombudsman at the Banco de Espana in Madrid?  

 

Allan

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The infamous “Ground clause” (Clausula Suelo) is declared null and void for being abusive

Banks to give money back to their clients after the infamous “Ground clause” (Clausula Suelo) is declared null and void for being abusive. This will mean an important and immediate saving over the term of the mortgage.

The first sentences have been granted, declaring the so-called “ground clause” - a minimum interest rate that financial institutions apply to many mortgages in order to insulate themselves from possible declines in the Euribor –null and void.

By means of this clause the banks apply a minimum interest rate, despite the fact that the interest rate governing the mortgage is lower.
The sentence pronounced by the Mercantile Court number 2 of Seville declares these clauses null and void for being abusive; specifically the ones applied by the following banks BBVA, Caixa Galicia and Cajamar, since April 12th, the “ground clause” can no longer be put into effect.
All of this could be a chance for those mortgage holders who may have been paying this minimum interest rate, to proceed to demand the refund of the extra money charged. In most cases this would mean thousand of Euros, as well as the disappearance of this minimum rate over the rest of the term.

As a consequence of the said sentence, the affected bankshave requested from the judge an extension of the 2 month period granted in order to give the money back, on the grounds that managing the refund of the extra amounts charged is a “complex process”.
Despite the sentence, the three banks, BBVA, Caixa Galicia and Cajamar, have insisted on the fact that the “ground clause” is a “legal practice”.
Nevertheless the banks will not make any refund unless the client demands it. Any client who wishes to have the refund process started will have to take legal actions.

In the case of BBVA the “ground clause” established a minimum interest rate for its clients of 2, 5%. In Caixa Galicia the minimum was 2, 75%, while in Cajamar 3, 25%.

The evident unbalance between “grounds” and “ceilings” imposed by these banks (BBVA-12%, Caixa Galicia-10% and Cajamar-15%), has been the main reason why this sentence declared these unfair clauses null and void, as they meant a profit for the bank without any reciprocity that could benefit the consumer.

IT’S NOT THE ONLY ONE

This sentence, passed last January 26th and that came into effect on April 12th, is not the only one to declare “ground clauses” as abusive. Last March, the Mercantile Court number 1 of Leon sentenced Caja España to remove the “ground clause” of its mortgages and to refrain from using it in the future, a fact which led to thousand of mortgage loan holders to benefit from important reductions in their following monthly repayments. In the sentence against Caja España, the judge underlined, in addition to the significant unbalance between “ground” and “ceiling”, Caja España’s bad faith to include and impose this clause as part of the general terms and conditions, without allowing the client any possibility of negotiation.

 

The Banks hid the “ground clause” to 87% of their mortgage holders, according to Facua

The consumers’ association Facua denounces, following a survey carried out among more than 3.200 mortgage holders, that 42% of mortgages include the so-called “ground clause”. In 87% of the cases the Banks did not inform their clients about this clause at the signing of the mortgage. Furthermore, 27% of those polled do not know whether their mortgage includes this clause or not.

The 40% of the mortgage holders declare not to have received full and comprehensive information about the interest rate to be applied to their mortgages, nor about the subsequent revisions before taking out the loan and 55% were not even informed about the commissions and expenses entailed by the signing of their mortgage.

The number of complaints against Banks continues to grow among clients whose mortgages include ground clauses. These complaints are based on the lack of information they received when taking out their mortgages as well on the fact that this clause is considered abusive and imposed by banks.

Source: El Mundo

http://afectadosclausulasuelo.org/#

 

http://www.ausbanc.es/web/sec57.asp

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Hi keith110,

I found this thread over the Christmas holiday whilst in UK with lots of time to spare. I enlisted a Spanish friend to help with submitting the pro-forma letter and that has been with Solbank for about 3 weeks now. Imagine my excitement to log in this morning and find that on the second link that Solbank have accepted the illegality of the "Clause Sualo" and paid out euro 6000 +. My friend had said that I should be prepared for them to dig their heels in and I had to have a plan to fall back on when the 30 days expires.

My question is since one swallow does not make a summer what is the next step if they do not concede that we have overpaid for 4 years since we have had a floor rate of 4.25% applied for that period and we know that eurobor has been much lower over that time?

Thanks in advance, John.

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Hi John

If Solbank does not respond to your initial letter then you will have to either:

Contact Ausbanc and see if they will contact the bank on your behalf

http://www.ausbanc.es/web/sec57.asp

Contact ADICAE and see if you can join one of their group actions

http://afectadosclausulasuelo.org/# 

Or contact an independent Laywer who specialises in this field and take legal action against Solbank.  Your Lawyer can include relevant Case Law in your Lawsuit.

Maybe María from CostaLuz Lawyers or Guadalupe from GM Legal Experts - both who post on EOS, may be interested to take on these kind of cases.

I am sure there are many people in Spain with the Cláusula Suelo included in their mortgage - many of them probably don't even realise.

In my mind this abusive clause is similar to the PPI mis-selling issue in the UK.  It should be dealt with by the Banco de España and all banks should be forced to remove the floor limit, recalculate all interest paid and refund the amounts charged under the abusive clause.

In many cases the floor limit was set at around 4.25% and the upper limit, which was intended to protect consumers was set at around 11% or 12% and sometimes higher.

Since its inception in 2000 the Euribor has never exceeded 6% and for long periods has remained between 1% and 2%.  Therefore, the floor limits and upper limits set by the Banks created a significant imbalance and were of a clear detriment to the consumer.  This is a violation of good faith as these clauses were biased and totally in favour of the Banks.

The floor limits were restrictive and detrimental to the consumer and the upper limits which were designed to 'protect the consumer' were set at a level which were on most occasions more than twice the level that the Euribor has ever reached.

The Euribor is currently around 1.70%.  So on a mortgage sold to you as Euribor + 1% you should be paying an interest rate of 2.70%.  The Banks 'sold' the mortgages with headlines such as Euribor + 0.5%, Euribor + 1% etc.  This was their main selling point - Euribor plus a low differential.  The Cláusula Suelo was never mentioned and only included in the small print.  A clear case of mis-selling.

This is just another abuse of the buyer and home owner in Spain.

BUYER BEWARE

Kind regards

Keith

This message was last edited by Keith110 on 27/02/2012.

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Very useful links, Keith, many thanks.

Does anyone know what the situation is with mortgages for which the reference rate is "de cajas" ( as opposed to the Euribor). I know that this is usually higher, but haven't been able to find the historic rate to decide if my bank has moved the goal post.

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IRPH Cajas - January 2012 - 3.793%

Euribor Media - 1.688%

2008-2009-2010	IRPH Bancos	IRPH Cajas	IRPH Entidades	CECA	Euribor	Diferencia IRPH-Euribor
Octubre 2008	6,159	6,331	6,253	7,000	5,248	1.005
Noviembre 2008	6,166	6,341	6,258	7,000	4,350	1.908
Diciembre 2008	5,635	6,084	5,891	6,625	3,452	2.439
Enero 2009	4,684	5,203	4,983	6,125	2,622	2.361
Febrero 2009	4,120	4,492	4,324	5,625	2,135	2,189
Marzo 2009	3,581	3,997	3,821	5,125	1,909	1.912
Abril 2009	3,355	3,743	3,573	5,000	1,771	1.802
Mayo 2009	3,154	3,616	3,411	4,875	1,644	1.767
Junio 2009	3,010	3,496	3,294	4,750	1,610	1,684
Julio 2009	2,945	3,375	3,187	4,875	1,412	1,775
Agosto 2009	2,811	3,290	3,084	4,875	1,334	1,750
Septiembre 2009	2,632	3,260	2,990	4,875	1,261	1,729
Octubre 2009	2,554	3,182	2,921	5,000	1,243	1,678
Noviembre 2009	2,487	3,123	2,859	4,875	1,231	1,628
Diciembre 2009	2,484	3,058	2,819	4,625	1,242	1,577
Enero 2010	2,487	3,025	2,810	5,125	1,232	1,578
Febrero 2010	2,425	3,089	2,813	4,875	1,225	1,588
Marzo 2010	2,476	3,009	2,780	4,375	1,215	1,565
Abril 2010	2,499	2,996	2,786	4,750	1,225	1,561
Mayo 2010	2,324	2,920	2,674	4,750	1,249	1,425

Junio 2010	2,443	2,921	2,709	4,500	1,281	1,428
Julio 2010	2,432	2,924	2,705	4,,125	1,373	1,332
Agosto 2010	2,543	2,938	2,766	5,000	1,421	1,345
Septiembre 2010	2,652	2,927	2,799	5,125	1,420	1,379
Octubre 2010	2,600	2,963	2,795	4,875	1,495	1,300
Noviembre 2010	2,627	3,002	2,825	4,750	1,541	1,284
Diciembre 2010	2,593	2,945	2,774	4,750	1,526	1,248
Enero 2011	2,679	3,144	2,918	5,000	1,550	1,368
Febrero 2011	2,786	3,132	2,962	4,875	1,714	1,248
Marzo 2011	2,935	3,294	3,120	5,000	1,924	1,196
Abril 2011	3,115	3,327	3,226	4,875	2,086	1,140
Mayo 2011	3,238	3,471	3,355	5,250	2,147	1,208
Junio 2011	3,355	3,559	3,458	5,375	2,144	1,314
Julio 2011	3,446	3,624	3,540	5,250	2,183	1,357
Agosto 2011	3,467	3,590	3,533	5,750	2,097	1,436
Septiembre 2011	3,428	3,694	3,570	5,500	2,067	1,503
Octubre 2011	3,504	3,659	3,586	5,875	2,110	1,476
Noviembre 2011	3,641	3,747	3,696	5,625	2,044	1,652
Diciembre 2011	3,509	3,739	3,626	5,125	2,004	1,622
Enero 2012	3,629	3,793	3,716	5,375	1,837	1,879

 

 

 

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This is very interesting. I had no idea until a couple of years ago that I had a collar on my Caja Murcia mortgage.

 

I contacted them today with the facts listed below and was told that i was badly misinformed and this was totally legal and I should check it with my lawyers.

 

I have contacted my lawyer and await their reply.

 

Any suggestions on how to proceed?

 

Cheers, Carl

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