Illegal bank fees when taking out a mortgage

Earlier this year I took out a mortgage on a home from a well-known Spanish bank.

As part of this mortgage, there were several other fees that we got landed with (Notario fees, mortgage taxes etc).

However, since taking out this mortgage, I have found out that possibly some of these fees should have been covered by the bank, rather than myself. I have also found out that my bank have been offering "refunds" of some (i.e. around a third) of this amount to clients who request it without too much hassle - as long as they sign an agreement promising no further action will be taken against them.

For several reasons (mostly cost) I am not looking to hire a lawyer and force this through the courts. However, I would like to pressure this bank into returning all the monies that they are required to (not only a small part).

So my question is, does anyone know:

1) Exactly what items are illegal to charge for when setting up a mortgage (I am pretty certain the Notario mortgage fees can be claimed, but I'm not sure about the rest)?
2) Does anyone know of any court precedents either nationally, or in Andalucia that I can quote? 
3) Is there an equivilent of the financial ombudsman in Spain?

Thanks in advance

Maria de Castro kindly posted some details on EOS back in August 2018.

https://www.costaluzlawyers.es/2018/08/21/list-of-all-abusive-clauses-that-a-mortgage-may-contain/

Also she has a legal podcast

https://www.eyeonspain.com/blogs/legalpodcast/18599/monthly-legal-podcast---send-us-your-questions.aspx

We had a mortgage with Banco Halifax at the time now transferred to Sabadell, we have two lots of charges as we changed mortgage to Interest only for two yrs so we had to pay fees again to to Notary etc, on top of that we had to make a one of payment of life Ins to cover us both of over 800 euros over that two yr interest term, I can't believe how sneaky the banks are here and hoping we can claim back those fee's even possibly the Ins cost, where is the law written online that I can print off, sorry to jump in on your thread theline.

Was this a property purchase where you used a professional Spanish lawyer to check all the clauses and fees within the mortgage offer were legal before you signed it or was it a DIY arrangement between you and a bank?

Abusive clauses by definition are abusive no matter what the background circumstance,,are they not?

The Banks in this regard appear to be challenging  and disrespectful of increasing SC rulings that have been protective of consumer rights, which have taken years to achieve.

I wonder at what point does such continuing abusive behaviour and non compliance with their ethical mission statements become a direct challenge to the rule of law in Spain?

With respect why not have the good manners to give the OP a chance to answer before trying to hijack the thread for your own fixation. We all want to learn a bit more about what’s gone on instead of turning the thread into your usual bank mudslinging abuse.

Your statement offers no help or advice to the OP and therefore has no useful purpose.

Enough of your personalising nonsense Kavanagh.

Yes we had a lawyer for the initial mortgage application but not for the 2yr Int only change, I personally know someone who has put a request in with appropriate paperwork for return of fees to Sabadell who have refused to pay anything back. 

Hi there ferrotty

Your questions are somewhat specialist legal questions, but I understand you asking on EOS just in case someone else has been through this experience.

Most EOS members have a basic understanding of UK law and regulations, but when it comes to the chaotic culture of Spain most of us don’t know whether we are batting or balling.

Basically in my opinion your Spanish lawyer’s duty is to protect and advise you that everything is legal, above board and fair in the mortgage contract and any side issues associated with it. That is what he/she is supposed to be professionally qualified to do and the reason you engage them at your costs and pay their fees.

In your particular case who is at fault? The bank for trying it on or the lawyers for letting them do it and getting away with it?

If it was the UK you would take action against the lawyer for every penny you are owed and probably get it all quite quickly. But in the no one gives a toss Spain culture who knows. Maybe start with the HOJAS DE RECLAMACIONES (CUSTOMER COMPLAINT FORMS) one at the lawyer’s office and one at the bank.   

According to the Irish Times last year https://www.irishtimes.com/life-and-style/homes-and-property/spain-forces-banks-to-refund-fees-on-mortgages-1.3110486

“In December 2015, Spain’s supreme court ruled that clauses introduced by two Spanish banks, forcing borrowers to pay all fees associated with taking out mortgages and buy-to-let loans, were abusive. Additionally, the court ruled that banks should pay for at least part, or in some cases the entirety, of these set-up expenses. It reasoned that it is the lender that requires the lien of the debt placed on a title deed, so it should also be responsible for the associated fees.

Floor clauses have long been used by Spanish banks to protect their profits in a low interest environment. These have now been deemed illegal by both Spanish and European courts.”

So the question remains, are Spanish Banks being obstructive to this ruling by forcing people to take them to court and yet again place additional strain on an already overstretched justice system?

It seems so wrong to disrespect SC rulings, and uncomfortable as it may be Kavanagh these growing instances and impacts by the Banks failure to respect the law need to be recognised. This is relevant to this thread and I would appreciate it if you didn’t constantly try to undermine these uncomfortable realities by unnecessary and vindictive personalised postings.

According to an informative article in Elpais back in 2017.... https://elpais.com/elpais/2017/01/09/inenglish/1483976797_752983.html

“Who is eligible?

The Supreme Court’s ruling of December 23, 2015 affects everyone who is currently paying a mortgage or who paid it off up to four years ago. Claimants should try their bank’s ombudsman or claims department first, and later turn to the courts if necessary. The deadline for filing a claim is four years after the Supreme Court ruling, meaning December 24, 2019.

For borrowers who have already paid off their mortgage, they may claim a refund if the full payment was made four years prior to the ruling – that is to say, on or after December 23, 2011. The ruling applies to individuals, not corporate borrowers, and to primary residences and second homes alike.

What fees can be claimed?

People who have already filed claims are asking for a refund on the fees they paid for the notary, the mortgage land registry and the gestoría, 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). Claimants have also asked for a refund on the stamp duty (Documented Legal Acts tax or AJD to give it its Spanish acronym).

While there is no hard-and-fast rule that applies to all cases, these mortgage set-up fees typically represent between 2.5% and 3% of the home loan.

How much can I ask for?

That depends on the amount of the loan. According to OCU’s calculations, if every fee is returned, including the AJD stamp duty, it could be in the range of €3,000 for a €150,000 mortgage.

Is only a portion recoverable?

Yes. Some judges are ordering a refund on notary, mortgage land registry and gestoría fees, but not the AJD duty, which in fact represents 75% of the associated expenses when taking out a mortgage.

Based on rulings by the Supreme Court and the Provincial Appellate Court of Zaragoza, lawyers consulted by EL PAÍS said it is the banks who should put up with the cost of processing the stamp duty. On the other hand, the provincial appelate courts of Oviedo and Pontevedra have ruled that this fee should be paid by the client.

In any case, there is no refund for the Property Conveyance Tax, which always falls to the home buyer.

What documents are required to file a claim?

The mortgage deed, the notary’s invoice, the land registrar’s invoice, and the tax form documenting payment of the AJD duty (form 600).

Which banks have changed their fee clauses?

At least the following six: BBVA, Santander, Bankia, CaixaBank, Sabadell and Ibercaja. The changes seek to prevent future claims on new mortgages. But this does not prevent clients from claiming refunds for loans signed in the past.

Do I have a clear case in court?

One should never think that it is easy to win, much less against banks with enough resources to appeal any unfavorable decision. But the fact that they have changed their own clauses following the Supreme Court decision (which called them “abusive”) means that lenders are aware these fees were not properly established. There have been rulings for and against individual plaintiffs, and it is too early to know whether borrowers are going to be winning any major victories in court.”

If the Supreme Court ruled in 2015 why are Spanish lawyers not identifying illegal and abusive clauses?  

To repeat, Maria’s posting that I referred to did just that Kavanagh.

https://www.costaluzlawyers.es/2018/08/21/list-of-all-abusive-clauses-that-a-mortgage-may-contain/

Of course there are law firms that have failed to protect from these abuses which is equally wrong, but banks whose abuses existed in the first place should be made accountable and effectively disincentivised from continuing with their ploys before it causes a collapse of the court system. It’s not fair on citizens and the justice system alike for them to continue to disrespect SC rulings and fail to comply in this way. Especially when you consider how long it has taken to achieve SC rulings.

There is something basically wrong with allowing Banks to continue ad infinitum in this way and cause such chaos in their wake.

We all know the banks are a set of thieves; you have posted it that many times we have forgotten. If all the Spanish law firms advised their clients correctly and sent the mortgage contracts back to the banks highlighting the illegal and abusive clauses the banks would stop sending them out.

I do not understand why law firms blatantly ignore their professional responsibilities to their paying clients and are co offenders in this illegal abuse. What are clients actually paying law firms to do? Why do law firms exist and what is their duty and to whom?

Are law firms actually regulated in Spain and bound by the law or are they just another gun ho cowboy industry that take as much as possible of clients money for doing nothing.

If all clients started legal proceedings against law firms for neglect instead of paying them more money to correct their neglect things may change sooner than your bank mudslinging campaign. 

So much to address within the Spanish real estate industry but until a respectable law firm is prepared to set a precedent and realistically tackle the problems you identify Kavanagh, let alone influence the Bar Associations from within, to better regulate their members, you have little chance of success.

There is much protectionist psychology to overcome and observations have frequently been expressed that it’s not for non nationals to “ interfere”, and several have sadly interpreted this as arrogance , when in reality it’s been a case of striving to work together to improve the status quo, to strive for standards that have the potential to benefit all in the longer term and reassure buyers willing to invest, without fear of  being exposed to unintended consequences relating to growing abuse of this nature. 

Better perhaps it’s important to focus in the interim on a more realistic route to gaining timely justice by striving for more resources to assist the courts and judiciary,  and a more efficient justice system ( with emphasis on achieving speedier SC rulings and doctrine) which would curtail the Banks ability to play the system of delays to their advantage. 

It’s a complex mix that frustratingly requires time for trust to be developed between the various well meaning folk who genuinely want to tackle the problems, strive for solutions and aspire to a less confrontational and civilised real estate industry where abuse is adequately regulated. Never say never!

Have to agree Kavanagh, but the whole point of Spain doing what it wants is down to the fact they don't believe anything is wrong with their system and way they do things,  so why change it, seems to me that you can give advice to everyone, getting anyone to take notice of it is another thing.

Quite right baz

The BANK is the criminal, the offender. The LAWYER is the policeman. The CLIENT/PUBLIC is the victim. Throughout the world (excluding Spain) this applies. The policeman’s duty is to stop the criminal in order to protect the public.

I suppose at the end of the day if you don’t like Spain’s corrupt behaviour it’s accept it or get out.

Ads ‘’striving for more resources to assist the courts and judiciary’’ would not be needed if lawyers carried out their proper duty in the first instance. The banks are aware the lawyers don’t give a toss and it therefore encourages the banks to continue illegal abuse and ignore Supreme Court rulings.

I understand your analysis  Kavanagh and Baz but I would also love to hear Maria’s take on this from an internal and honest perspective.

In terms of “accept it or get out” then wouldn’t that mean that the abusers carry on regardless with their abuse, that this is no solution to abuse in the longer term?

In terms of resources, the reality is that here and now there are thousands in the legal system fighting for their rights so IN THE INTERIM you cannot ignore the fact that resources are being stretched to their absolute limit and the system is at risk of contravening the rule of law with regard to timely justice.

But ads ‘’no solution to abuse in the longer term?’’ The Spanish don’t want a solution, they don't believe anything is wrong with their system and the way they do things, it’s only you and maybe a few more expat foreigners here in Spain as guests that are complaining.

The whole thing seems to be a closed shop and the Spanish public are quite happy with it. I wonder what circuit the Christmas hampers take between the Banks, Supreme Court, Lawyers, Bar Associations. It would take Bobby Kennedy to sort this lot out.

Kavanagh

Our posts crossed as I responded to your point about resources.

But as for your latest observation are you sure the Spanish don’t want a solution? What about those who have had their properties repossessed, those who are also being denied return of monies re mortgage clause abuse ( I think Maria identified some statistics on this), those within the industry who have been affected by the downturn in real estate activity over the years since the Banking crisis, those impacted by the negative press covering some of these realities that understandably impacts trust in the system and its effect on the Spanish economy?

This is why I would like to hear from Maria to gain a Spanish perspective on the legal impact on Spanish nationals and perhaps her own personal observations and frustrations she has witnessed firsthand and her legal colleagues within the justice system. I would like to think that enough of them care what happens to their clients, what is happening to their justice system from the impact of banking abuse etc,  do they aspire to reform, do they see their role in the reform process, or do they feel it is not part of their remit? So many questions I’m afraid. 

No lawyer is ever going to publicly admit that they do not care about their clients. But it is a fact for all to see that if they did care and had done half the job they were supposed to do many clients would not be in the situation they are in.

It’s difficult to try and understand this cowboy culture of Spain and I doubt any Brit will ever grasp it. The chaos in the justice system lays directly at the day to day lawyer neglecting his/her duty and it would seem all those connected with the justice system thrive on it as a guaranteed meal ticket.

The banks can clearly see that the legal professionals (if you dare call them that) have no standards other than greed and corruption; this leaves everything wide open to their criminal and immoral activities.

 Spanish national’s attitude to all this is also confusing; they just don’t seem to care and accept it as a normal way of life. Perhaps they don’t know any better.

You seem to mention Maria in almost every post you make, but I doubt she will ever admit her profession is as bent as a nine bob note and the major cause of the delinquent banking and justice system.