This european justice mortgages tied to the reference index of mortgage loans will reign again this Thursday (IRPH), upheld by the Supreme Court, but which Court of Justice of the European Union (ABAD) at the request of a court of first instance in Palma de Mallorca. Although up to 18,000 million are spoken, there is a minimum of 3,000 million euros. Banks are trying to convey the calm by stating that the CJEU has decided on this issue for the fifth time and that the previous decisions did not cause any discontent for the parties. Now, the CJEU will have to resolve preliminary rulings referred to by the Palma de Mallorca court of first instance in March 2022 on whether businesses market the IRPH without applying a negative difference to equate it with other types of markets. He established the normative criterion of the circular of the Bank of Spain dated 5/1994: an unfair practice and an indication of its abusive nature.
1. What is IRPH?
HE IRPH It was an official directory, which was no longer used. Bank of Spainand the second most used for floating rate mortgages, after Euribor. To calculate this, the interest charged by the organizations is averaged, including spending on mortgage loans over three years. It has almost always been higher than Euribor. It is more beneficial for the banks and in most cases negative for the customer. Until November 1, 2013, three types of IRPH lived together. From then on, two of them (IRPH banks and IRPH savings banks) stopped issuing as determined by EHA/2899/2011 of 28 October on transparency and protection of banking services customers. Only the IRPH of the entity cluster is preserved. The Bank of Spain publishes it under the name “Average rate of mortgage loans over 3 years for the acquisition of free housing”. It was 3,967% in May and Euribor 3,862% in the same month.
2. What is the problem?
It is not an illegal mortgage reference, but has generally been higher than Euribor. Discussions about this index started around 2013. When Euribor starts to drop until it drops to negative levels. But the real question is the procedure banks follow when selling. It has been questioned in this sense. transparency. A client’s request for a mortgage from Bankia in 2018 for 132,222.66 euros, which was given an IRPH interest rate above 0.25 points in 2001 and whose loan became more expensive between 18,000 and 21,000 euros, resulted in the Barcelona first court holding it hostage. Preliminary decision so that the Supreme European Court can examine whether the product has been marketed properly transparency. Last year, the Supreme Court upheld this reference, although it acknowledged that it was not transparent. i.e. unpunished reproach. Previously, European justice, IRPH is not transparent. After the Supreme Court’s decision, the Palma first-instance court raised another issue to CJUE for a preliminary ruling.
For years, banks have told their clients that IRPH is safer than Euribor because it changes less from month to month. But many have stopped counting how it is calculated and will almost always be traded higher than Euribor. In other words, there were people who rented. IRPH linked loan without knowing what they’re contracting to and what’s going to cost them more. If the European courts decide in favor of consumers, the door to litigation will be reopened to those affected by this index in cases where banks do not comply with the provisions of the circular when marketing these mortgages. Otherwise, the options to do so are reduced. For years, first-instance courts have agreed with consumers, considering that in order to be transparent, the contract must include detailed descriptions such as comparisons with other indices, estimates of its historical development and evolution, but the Supreme Court and later the CJEU have greatly limited it. these requirements.
3. How much is in danger?
There are few current figures on this subject, and most banks quickly point out that this represents a residual weight in their mortgage portfolios, in many cases inherited from legacy savings banks. In 2019, it was estimated that those affected could be around one million customers and the bank’s risk could be around €18,000 million. Different organizations later reported that they were exposed to this type of loan. Caixabank At the top of the list, it ranked second with 6 billion 446 million euros. Santander Bank (4,300m euros, mostly from Banco Popular, which it absorbs); HE BBVA (3,100 million euros), bankia (1,600 million euros), banc sabadell (831 million euros), Liberbank (209 million euros, of which 99.5 million to bank employees) and unicaja (200 million euros). kutxabank He admitted he was exposed to the €727m risk of IRPH. bankerFor its part, it has ensured that it does not commercialize any of the mortgages referenced in this index. Some organizations also confirm these figures, which were given three years ago.
Source: Informacion
James Sean is a writer for “Social Bites”. He covers a wide range of topics, bringing the latest news and developments to his readers. With a keen sense of what’s important and a passion for writing, James delivers unique and insightful articles that keep his readers informed and engaged.