The safety net What was the government looking for? before the unbridled escalation of the Euribor it will be available to almost all those mortgaged in Spain considered vulnerable or at risk of becoming so. Financial entities had one month to adhere to the new Code of Good Practices before it came into force on January 1, 2013, once the Royal Decree-Law was published in the BOE. Y, practically all entities they have not rushed the deadline and have been adheringprior ratification by their boards of directors.
Only with the acceptance of the main banking groups, Banco Santander, BBVA, Banco Sabadell and Caixabank (also the first to make public the acceptance of the agreement) the protection was up to 85% of the mortgage debtors, they explain from the AEBbut these names have been added in recent weeks by other entities such as Evo Banco, ING, Bankinter (whose board of directors ratified it last week) and Openbank among others.
Likewise, in the last CECA council, the associated entities, among which are included CaixaBank, Kutxabank and Cajasur Banco, Abanca, Unicaja Banco, Ibercaja Banco, Caixa Ontinyent and Colonya 2 3 Pollença, ratified being part of this umbrella both with the extension of the current Code of Good Practices to the new one, which will have a transitional regime with a duration of two years. The confirmation of the employers’ association that brings together the savings banks and the banks created by them is vital since their market share in mortgage loans is 46%. In short, with these adhesions practically 100% of customers with mortgages are reached.
Update of the Code of Good Practices
The escalation of euryborwhich in the year has risen more than 730%, could put variable-rate mortgages in trouble, especially those who signed their credits when the reference index was in negative and they have a longer repayment period ahead. This led the employers of the financial entities that operate in Spain, AEB, CECA and Unacc, together with the Government of Pedro Sánchez to negotiate an update of the Good Governance Code approved in 2012. Thus, the agreement against the clock that they reached consisted of updating the previous Decree-Lawto which all financial institutions (a total of 80) operating in Spain had subscribed in 2012, to adapt it to the current context.
Financial institutions would have 15 days to abandon it, but maintaining it is mandatory. The measurements that are contemplated is to apply a capital grace period of five yearsa period in which debtors will only have to pay interest, the bank must also lower interest to Euribor -0.10% during those years and extend the term of the mortgage to a maximum of 40 years.
In order to access these measures, the family unit must be at the “exclusion threshold”. That is to say, that the joint income cannot exceed 25,200 euros per year; the percentage of the income destined to pay the installments must be greater than 50% and the mortgage charge must have risen by 50% during the last four years, either due to the increase in the price of the Euribor or due to any other circumstance. In the event that the mortgagor meets all the requirements, unless the mortgage burden increases by 50% or more, he or she could request a two-year capital grace, reduce the interest applied during that period and extend the term of the mortgage by 7 years, without exceeding 40 years as a total term. According to the calculations established by the Executive, these measures could benefit up to 300,000 debtors.
Measures for middle classes
The reform also includes measures for the middle classes who find themselves in a situation of vulnerability in the face of the escalation of the eurybor. In this case, the family income cannot exceed the 29,400 euros per year. For these cases, the mortgaged person may choose between two measures. The first extend the term of the mortgage up to 7 years, but without exceeding 40 years in total, which would allow the installment to be lowered to the amount paid on June 1, 2022. In addition, it would have the possibility of freezing it in the following 12 months and reducing the interest applied during that period.
The The second option is to transfer your mortgage from a variable rate to a fixed rate, but according to an interest set by the entity itself. In this case, it will not mean a reduction in the fee, but it will prevent bill fluctuations regardless of the evolution of the indicator. In both cases, the requirements are the same: that the mortgage burden is over 30% and that it has increased by 20% in the last four years.
Interest of the bank to control delinquency
And it is that there is interest within the sector to help the mortgaged. The goal is that the mortgage delinquency, which continues at minimum does not trigger. “We are strongly committed to supporting society and especially families with the greatest difficulties in the current situation. At BBVA we always work hand in hand with our clients to find personalized measures according to their needs and moments of life”, pointed out the ‘country manager’ of BBVA in Spain, Peio Belausteguigoitia, in the adhesion statement.
The meaning of these words has been repeated both by the CEO of Banco Santander until December 31, Jose Antonio Alvarezlike the president of Caixabank, Jose Ignacio Goirigolzarri.