##The law 5/2019 of March 25, which regulates real estate credit agreements, entered into force on June 16 following the European directive 2014/17 / EU. The new law clarifies aspects so far veiled because of certain banking practices and diffuse jurisprudence, in a clear intention to protect the rights of consumers of mortgage loans.
The practice of applying for a mortgage in a bank and appearing in the Notary on the day of signing to adhere to some contractual conditions impossible to question and sometimes even to understand, has changed considerably. From now on, at the same moment that we receive the terms and conditions of our mortgage through the European Standardized Information Card (FEIN), which replaces the FIPER, we will receive the Standardized Warnings Card (FiAE) that will inform us on detail about the risks associated with our mortgage, we will obtain details of the expenses related to the operation that pertain to each of the parties and also, if the interest chosen is variable, we must receive from the lender an individualized document in which reflect different scenarios of evolution of interest rates and all this, at least ten days before granting the mortgage loan deed.
But not only should the borrower receive this information also the notary of his/her choice should and also provide free, personalized advice to the borrower and guarantors, if any, who will be tested to determine that they have fully understood the loan circumstances. This test must be done in the presence of the notary who will present a minute reflecting that the test has indeed been positive (or negative) and deadlines to receive the information has been accomplished. This diligence must be done at least one day before raising the public deed, so from now on when signing a mortgage we must visit the notary at least twice.
The provisions of this new law will have a direct impact on the consumers pockets, the “Clauses Suelo” do not longer exist and related to the mortgage expenses, we will only pay the copies of the deed and the valuation, being the value reflected the minimum sale in case of public auction. The lenders will have to cover the notary expenses, the registry, the management agency and the tax of legal acts documented. In addition, the new Law establishes that the default interest can only be increased by 3 percentage points and the early maturity of the borrower default will only occur if the unpaid installments reach at least 3% of the amount of the granted capital if it occurs in the first half of the loan duration and 7% if it occurs in the second half.
However, the advantages do not end here. Related products to the loan, such as home insurance, are prohibited if they are not offered separately, and each month of January, during the term of the loan granted, the lenders must deliver a settlement of interest and commissions clearly indicating the interest applied, as well as the commissions and any other associated expenses. Likewise, in the case of any change with respect to the applicable interest rate when it is variable, this circumstance must be communicated to the interested parties with at least a minimum of 15 calendar days in advance and in case of substitution of variable interest for fixed or subrogation of a third party, the bank commission will have a limit of 0.15% during the first three years of validity and 0% from that moment.
Many advantages but without a doubt many changes that have led to notaries and banking entities, together with their external management companies, to work in the way of sending and receiving all the documentation required for compliance with the Law, changes that could not be specified in time for the entry into force, a fact that has been resolved by the Ministry of Justice granting a moratorium of one and a half months, that is, until July 31, to update the computer platforms of credit institutions and notaries .
Virginia De La Cuadra Galera / English Speaking Spanish Lawyer – Abogada
firstname.lastname@example.org / + (34) 680 438 775
G.V. Marqués del Turia, 20-6, 46005 Valencia – SPAIN