Extended Window to Reclaim Mortgage Formalization Costs Now Ends Mid-April 2024
The window to claim reimbursement for the costs associated with formalizing mortgage loans has been extended, giving borrowers additional time to seek compensation. This extension is connected to decisions stemming from banking practice adjustments that affect how these costs are treated for customers who took out mortgages before recent regulatory changes.
The extension follows a ruling brought by the Organization for Consumer Affairs (OCU) in 2015, which contended that it was improper for banks to require customers to bear all costs tied to the formalization of their mortgage agreements. The core issue centers on how banks allocate charges that borrowers are expected to cover as part of finalizing their loan documents. The decision laid groundwork for potential refunds where such costs were deemed not fully warranted by policy or law.
Originally, the deadline to request refunds was set for January 2023. It was extended due to delays in court procedures during the national emergency period declared in 2020 because of the pandemic. The regulatory framework allows for a five-year window to file judicial requests in these cases, with an additional extension of 82 calendar days for suspension during the state of alarm. This combination effectively pushes the deadline to mid-April 2024 for eligible applicants to seek reimbursement of these costs.
Eligible applicants are those affected by mortgages taken out before June 16, 2019, the date when the new real estate loan law came into force. The costs in question cover a range of charges associated with mortgage formalization, including all property registration payments that lenders may request, as well as administration and evaluation fees, and a portion of notary costs. This breakdown aligns with information provided by the OCU and clarifies what borrowers can expect to be reimbursed if they qualify.
Extending the period broadens the window for consumers to pursue compensation for what are considered excessive costs tied to the formalization of mortgage loans. Borrowers who meet the eligibility criteria can assess their situation and determine whether pursuing a refund aligns with their financial and legal circumstances. The overarching goal remains to ensure fair treatment in the handling of mortgage-related costs and to provide a clear path for recovery where appropriate.