Recently, the final text of the Law regulating Real Estate Credit Contracts has been approved, which transposes the European Directive in defense of consumer rights. This change, which includes changes in favor of the rights of mortgage debtors, will start on June 17.
The change to the Mortgage Law, which responds to the European requirement to equate the internal legislation to Directive 2014/17 / EU, has the purpose of favouring a more transparent, efficient and competitive mortgage market, establishing uniform rules for all banking operators, increasing consumer protection.
The system for granting loans to prevent bank abuse is substantially modified: financial institutions will have to provide the client with paper or any other clear and understandable general information.
The Law will oblige the bank to carry out a prior and in-depth study of the client’s economic capacity, and in any case must consult the credit history in the bank of Spain.
INFORMATIVE OBLIGATIONS OF THE BANK
It will include the personalized information needed to compare the loan at least 10 days before signing the contract. This information will be provided in a clear and understandable manner through the FEIN (Ficha Europea de Información Normalizada), which will be a binding offer.
The FiAE (Ficha de Advertencia Estandarizada) will also be delivered, which will inform the borrower of the different clauses, the interest rates and the expenses incurred by a mortgage.
Another important figure will be that of the Notary, to which the borrower may request free advice to ensure that he has understood everything.
LIMITATION OF INTEREST ON ARREARS AND EARLY MATURITY
There is a limit to the products associated to the mortgage, so the bank can not force the signing of other products linked to the mortgage such as credit cards, pension plans or life insurance.
Mortgages can be converted to a fixed rate if the client requests it at a cost of 0.15% for the first three years and the rest for free.
In case the debtor is delayed in payment, the bank must send a letter of a prior notification which grants the client a minimum period of 15 days to make the payment.
Loans applied for prior to the entry of the new Law are excluded from its scope of application, except in the case of novation or subrogation after its entry into force.