Floor Clause

Hi, I have recently found out that it is very likely that I have a floor clause on my mortgage with the ( initially) the Caixa Penedes, but recently bought over by the Sabadell bank, when we took the mortgage out in June 2008 the eurobor was 4.9 %, our bank manager told us that we would be paying 1% above the Eurobor. we established that we would than be paying 5.9% which amounted to 1400 euros a month, the mortgage was taken out in 2008.

However despite the eurobor falling dramatically our mortgage payments have stayed the same for the last 8 years.

It changed last year when we sold part of the property ( split the deed) and got a new mortgage for our existing property.

I have had a look at the copia simple of the deed and although the 'floor clause' appears to be hidden i have spotted it hidden amongst the text, but it is 5.9% !!!! in all my googling I haven't found anything that high ??

Surely if it wasn't 5.9% my mortgage payments would have gone down at some point or other ?

I have the claim form from the bank and will fill it in as soon as i have all the info I need.

I am in total turmoil since I found out about this, we have struggled like crazy to meet the monthly payments to the point of selling our house in the UK and are now renting.

Has anyone heard of a floor clause that high ?

Lorna

In Maria's legal tip 1431 titled " Floor Clauses – Supreme Court confirms refund of ALL overpaid interest"

she observed with regard to the Supreme Court ruling....

"It is not specifically the Floor Clause that is illegal but the way it was included in mortgage contracts without its effect being fully explained to the customer.  This lack of transparency and lack of information is the reason this clause is deemed abusive."

So perhaps you should confer on this if you can prove that at no point you were provided with this required level of transparency ( for both contracts) ?

Perhaps Maria could advise on your specific circumstance?

I cannot remember seeing such a high floor clause.

In regards to transparency: 

https://blog.costaluzlawyers.es/blog/2017/01/27/questions-answers-extrajudicial-court-procedure-return-overpaid-interest-due-floor-clauses-spanish-mortgages/

I have translated our whole mortgage escritura and have found that we had a floor clause of 3% and a ceiling clause of 19% , which means that regardless of the floor clause we still paid 5.9 % throughout the term of this mortgage, despite being told quite categorically that we would be paying 1% above the eurobor, which does stack up as I believe the eurobor was 4.9% in 2008 when we took the mortgage out.

I think the reason why we continiued to pay this amount is because they snuck in another clause called a 'substitute rate' ( IRPH) .

I have sent the claim form to the Sabadell, both by email and airmail ( signed for). I have successfully claimed in excess of £30,000 by way of PPI refunds for both myself anf family so am getting quite good at this lol.

I did approach someone on their facebook page but they wanted 25% of the claim + VAT, !!!!!, what I can't understand is why are they ripping off people who have already been ripped off ?.

I have decided my approach will be to wait out the 90 days and see if I get a reply, then if not, then employ a lawyer to further the action, but not on a % basis, I would rather pay for services rendered.

I don't understand why, if you have a floor clause of 3%, you continued to be charged 5.9%.  The floor clause is just that - the lowest rate you would pay.  Strange.

We put our claim in with our bank, Banco Popular (previously Banco de Andalucia) and although they did take over three months (actually about five months!), they did pay out all overpaid interest, with interest on top of that.  We didn't use lawyers - just used the form provided by the bank.  

Hang in there!  And if you don't hear within 90 days, follow up with them, but don't resort to lawyers too quickly! 

We don't understand that either, we did query it but we were fobbed off by the bank.

Great news about your claim though ! Do you know what level of interest you had added to your claim, I know in the UK with PPI claims it is 8%