What has the Supreme Court said about foreclosure processes in its Judgment of September 11, 2011?
In its judgment, STS463 / 2019 of September 11, the High Court establishes the criteria to be followed in these cases, once the question raised by the Court of Justice of the European Union (CJEU) has been resolved.
The Supreme Court rejects the automatic filing of the procedure and makes it possible to replace the abusive clause with the legal provision that regulates the anticipated maturity, or, in other words, the minimum terms that the creditor must respect to execute the mortgage.
What are the minimum deadlines that the creditor must respect to execute the mortgage?
12 months or 15 months depending on the stage of the contract.
What about foreclosures already started?
- The processes in which the loan was terminated by the bank before 05/15/2013 by application of a void contractual clause of anticipated maturity, should be filed without further processing.
- The processes in which the loan expired after 05/15/2013 by application of a void contractual clause of anticipated maturity, must also be dismissed if the debtor’s default does not meet these requirements:
- During the first half of the contract compliance period: if the debtor owes already 3% of the loan which corresponds to a 12 months default.
- During the second half of the contract fulfilment time: if the debtor owes 7% and 15 months of default.
- If the breach meets those requirements, the process can continue.
And then… what? Can the bank begin another procedure?
The dismissal of the processes will not impede a new executive demand-based, not on the null clause of anticipated maturity but on the application of the new Law of Mortgage Loans.
What is your advice in cases of properties with negative equity?
In those cases, our advice is to check if the credit can be settled with the bank.
Spanish rules on minimums limits for banks to value properties when repossessing them, allow these settlements.
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