The Court of Justice of the European Union has ruled that consumers may seek compensation for unfair mortgage terms even after a loan has been issued and the property sold. Such a claim can be brought at a later stage through a separate judicial procedure and is not barred by the fact that the enforcement has already occurred.
The decision was issued at the request of a prosecutor in Zaragoza, and the case involved a Spanish consumer who signed a mortgage with Ibercaja in 2015. The loan was foreclosed and the property subsequently sold. In 2016, the bank asked for liquidation of the mortgage interest, while the consumer contended that the base and default interest provisions in the mortgage contract were abusive.
The consumer was unable to oppose the enforcement and to challenge whether the terms were abusive, a limitation that led the court to reject these objections and to proceed with liquidating the interests. This sequence prompted the consumer to escalate the matter to the European level by applying to the Zaragoza Provincial Court.
In its preliminary ruling, the Spanish court considered the enforcement procedure and whether abusive clauses could be examined ex officio. While the judge initially addressed these issues, the decision did not clearly reflect a formal review of the clauses. The ruling thus implicitly accepted the validity of the challenged articles.
Subsequent revision of articles
From this point the court clarified that Spanish law prevents reexamination when a check has already occurred and when the final judgment principle applies. It asked the Court of Justice of the European Union whether such national practice aligns with European law and what impact a later revision of the articles might have on ongoing cases.
The EU Court held that national legislation that blocks such ex officio examination of potentially abusive terms contravenes EU law. When neither the e-statements nor the consumer asserts abusive terms during the objection period, the judge is expected to evaluate ex officio whether abuse occurred at the outset of the enforcement process. However, the Court did not suggest that this examination should mandate a specific judicial decision, nor did it rule out reexamination in future circumstances.
Nonetheless the Court noted a practical limit: once a lien has been completed and property rights transferred to a third party, the judge cannot reopen the transfer or challenge its legal certainty on the basis of disputed clauses. In that scenario, the consumer should have the opportunity to pursue compensation for economic damage through a separate procedure that follows the initial enforcement stage.
EU case law confirms that abusive mortgage provisions must be declared void and that consumers have the right to recover amounts unfairly obtained by the bank. In this respect, four different decisions from ABAD reaffirm that national procedures must not undermine consumer protection. They emphasize that national judges should assess abusive terms ex officio and ensure that consumer rights are safeguarded throughout the legal process. [attribution to EU jurisprudence and ABAD rulings]