Mortgage floor cap

as anybody got any idea how to calculate the refund on the Spanish floor cap

regards

garry 

Ask here: https://www.eyeonspain.com/blogs/legalpodcast/16952/legal-podacast-with-mariua-de-castro.aspx

How long is a piece of string.........in theory it SHOULD be the difference between the EURIBOR+ rate quoted in your Escritura and the floor that you have been charged.....plus an allowance for interest on the overpayment of interest....a complex calculation owing to the movement in EURIBOR and when your annual reset was. From what I am hearing most of the banks are still trying to avoid settling and instead they are offering clients with the illegal clause a new super duper deal or some other B/S ("this offer is only on the table until Friday" was one such offer by a bank to the borrower). 

As Roberto says.....put it in Maria de Castro's hands she is a strong advocate and doesnt take any crap (or prisoners) when it comes to consumer rights 

Yes Smiley: refundable amounts include unduly paid interests and its corresponding interests.

Banks are arguing in some cases that despite a mortgage deed contains a floor clause, this is valid, if it has been sufficiently explained to the client.

When is a Floor Clause transparent?

a) The consumer must have been expressly informed that when the variable interest rate linked to the Euribor goes lower than a determined point, the interest rate effectively becomes fixed at a higher rate.

b) The consumer must have been informed that with a Floor Clause he will not benefit from the drop in the EURIBOR below a certain point.

c) The consumer must have been informed in a clear and transparent way regarding the inclusion of the clause.

d) The consumer must have received information on other products without a floor clause as a comparison before accepting the mortgage.

And the reality is Maria that nobody will have had the collar/floor explained to them and nor will they have had any other products offered to them. 

Will the banks use the excuse that as the borrower signed the mortgage deed they must have understood fully that the clause was in there? 

Dear Smiley:

An answer to your question ( hope it still helps despite yoiu formulated it back in February:

Supreme Court approved a Floor Clause as transparent back in February this year, due to the following reasons:

1.- Clause was remarked in bold letters, so it was not hidden among other clauses, misleading the attention of the consumer, but it is shown as a main clause of the contract , being expressed in a very clear way.

2.-  There are key elements for understanding that the setting of that clause was individually negotiated. Main element for this conclussion being that the consumer obtained a lower floor rate than what it was the general one then. All this being proved by the bank.

So, as a conclussion:

For a floor clause to be considered as " transparent", this needs to have been individually negotiated and understood by the client, and the Bank must prove it.

Hi Maria my question was more rhetorical than actual but thank you for the explanation.

In spite of the court decreeing that the bank has to prove that it was explained to a client will they argue that with the signature of the borrower on the mortgage deed the borrower must have known the existence of the clause. Reality is that on the day of completion at Notary everything seems to happen in such a blur that I think most mortgage borrowers are just thankful to get the completion finalised. Bearing in mind that often a lawyer has completed with a Power of Attorney who becomes responsible then? 

If the clause was not clearly highlighted and explained to the consumer, liability is on the Bank. A lawyer assisting a client at that moment would be more difficult to be declared as responsible by the Judge. 

More than a matter of professional liability, which might also be claimed, the judiciary are seeing these problems as a product of the unbalances of the financial system and therefore are punishing banks to restitute.