If you’re one of those affected by the multicurrency clauses included in many mortgages and seek legal advice, we can help. We’re a firm formed by lawyers and economists that hold vast experience and reliability in defending the interests of those affected by different financial products.
Excellence and quality in our work are our signs of identity.
We’ve been pioneers in defending the interests of those affected by Multicurrency Mortgages having achieved in many case the partial annulment of the mortgage, getting it changed to euros along with recovering the amounts overpaid to the bank.
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What has happened?
Multicurrency mortgages, along with the inclusion of IRPH (Mortgage Loan Reference Index) and floor clauses were extremely common in Spain during the “real estate bubble” (1997-2011).
This practice is in great part down to the large volatility of the Euribor during that time, in which it had a clear uptrend. Based on this uptrend, the banks, who knew this trend was set to change, opted to alternate their offers of mortgages referenced to Euribor with other option, among which we find the so called Multicurrency Mortgages.
These mortgages have one peculiarity which is that normally they are referenced to Libor, which is the interest rate fixed in the London Stock Market, with which banks outside the Eurozone lend money to each other, which in those years was much lower than Euribor, therefore implying the payment of less interest.
On the other hand, these mortgages, instead of being in Euros, were set up in another foreign currency, which in most cases was the Japanese Yen or the Swiss Franc, currencies which, in the case of the Yen, appreciated up to 40%, percentage which represented the rise in price of each monthly quote of mortgages referenced to said currency.
On top of that, not only did the monthly quotes increase, but also the debt left to pay increased, because this was in the foreign currency, so as the value of this currency increased versus the Euro, so did the debt.
The Supreme Court, with its 30th of June 2015 sentence, has established a multicurrency mortgage as the equivalent of a derivative and complex financial operation, applying Stock Market Law to it, establishing a series of requirements to be able to “sell” this product that in most cases the bank hasn’t met. This sentence is one of the main pillars of our defense.
The courts have also decreed the annulment of the abusive part of the contract reference the foreign currency, in accordance to the Law of General Contracting Conditions, the General Law for the Defense of Consumers and Users and through consent error according to the General Laws of the Civil Code.
What is the solution?
Negotiations can be started with the bank with the objective of reaching an our of court agreement. However, in our experience, the banks don’t tend to answer, and if they do, they tend to offer a much lower amount than that that is owed.
We recommend therefore to claim through the courts. In many cases the sentence has been favourable, the part of the contract referring to foreign currencies has been anulled and the overpaid amounts have been recovered along with interest and most of the time the legal costs that the bank are convicted to pay.
With the in court claim we achieve either the annulment of the part of the contract referring to the foreign currency, considering it abusive according to General Contract Conditions Law and the Law for the Defense of Consumers and Users or the partial annulment based on the fact the bank didn’t meet it’s transparency requirements during the contracting process of the multicurrency mortgage, preventing complete comprehension of the high risk for the borrowers.
Can I claim?
Yes. The recent Supreme Court sentence from the 25th of February 2016 outlines the fact that having financial knowledge, or having previously suscribed complex financial products isn’t a barrier to claiming.
The Courts consider financial knowledge as being familiar with the behaviour of the currency markets and experienced in making currency changing during the mortgage span.
The investment can be claimed also if it was done by a company, as long as it’s a retail company, i.e., a company not dedicated to investment or a major company that fulfills two of the three requirements listed below, taken from the article 78 bis 3.c) of the Stock Market Law (LMV):
1 – That the total assets is equal to or greater than twenty million euros.
2 – That the total amount of business is equal to or greater than fourty million euros.
3 – That the company’s equity is equal or superior to two million euros.
All people and companies that were sold this product can claim, be it for formal defects in the sale of the product (irregular sale that didn’t meet certain protocols), or be it for an error in the objective or absence of consent.
What can I achieve with my claim?
We can achieve the annulment of the part of the contract referred to the foreign currency, the change to euros and the implementation of the Euribor as a reference index, considering those clauses abusive due to General Contracting Law and the Law for the Defense of Consumers and Users or null and void on the basis that the bank didn’t fulfill it’s duty of transparency during the contracting process of the multicurrency mortgage, therefore not allowing the absolute comprehension of the elevated risk to the borrowers.
Individual or collective claim?
There have been some attempts to present collective actions and to group up the affected parties, however the bank has neutralized all these initiatives. We recommend an individual claim, as it is faster and more secure.
Who is the claim against?
The claim is against the bank that sells the product, in this case the mortgage.
How long does the claim take?
According to the judicial statistics service of the General Counsil of Judicial Power, a procedure like this could take, on average, nine months in First Instance Courts, and if it’s appealed, around another 5 months.
How do I know if my mortgage is a multicurrency mortgage?
Multicurrency mortgages are characterized by having among their clauses a reference to LIBOR (rather than EURIBOR) as the reference index for the calculation of the interests as well as the returns of the debt that are established in a foreign currency, rather than euros, which generally tends to be the Japonese Yen or the Swiss Franc.
Can I annul my multicurrency mortgage even though I have a binding quotation?
Yes. The Courts are annulling multicurrency mortgages, even if there are binding quotations sent out by the banks, on the basis that despite that quotation existing, the bank didn’t fulfill it’s transparency requirements during the contracting process, not allowing for the absolute comprehension of the high risk involved for the borrowers. However, each case must be studied to see what potential connotations the binding quotation may have.
I've made currency changes. Does that affect the claim?
Each case must be studied individually as must the circumstances that surrounded each currency change, as well as the information provided at that time by the bank.
What arguments do the other parties use?
The bank tends to defend itself from two perspectives:
(i) that we’re facing a mortgage like any other, just expressed in another currency and
(ii) that the implications of this type of mortgage were explained to the clients and these chose freely knowing perfectly well what the risks of this type of mortgage represented.
Where is the claim presented?
The claim is presented in the First Instance Court of the claimant’s address or of the address of the mortgaged property.
What are the chances of winning?
While it’s true that not all courts are acknowledging the nullity of multicurrency mortgages, there are evermore courts that are siding with the affected party, and with a good case study we’re succeeding in most claims.
I'm a business or have advanced education, is that a problem?
Each case must be studied individually. Obviously investment history, education and profession all have an influence on the chances of success, and in these cases the court takes into consideration how well versed the person is with the currency market, nevertheless, generally the court obliges the court to prove they informed correctly about the product, which they are forced to do, and it is on this argument that we base our claim.
When would I see the effect of the drop in my mortgage repayments?
Until we don’t have a firm sentence partially annulling the multicurrency mortgage, the bank will continue to apply said clause to calculate the mortgage quotes, therefore the sooner the claim is in place the sooner your quotes will drop.
Once won, how long will it take to get my money back? What does that depend on?
When a sentence is won we must wait a month for it to be firm. After that, the bank has another month to voluntarily deposit the money. If they dp, we must request that the Justice Administration hand us the money via a payment order. This can take another month. If the bank doesn’t pay voluntarily, we must present an enforcement claim, which can take another three months.
What's the worse case scenario if we lose?
The worse case is to lose the case and to be forced to pay legal costs. Legal costs will be a maximum of 1/3 of the claimed amount.
If the owner passes, can their heirs claim?
Yes, there are a multitude of cases of this nature that are processed and, proving the right to the estate, won. Any heir can act on behalf of the estate and process the claim, although it’s recommended it be done by a majority of representatives of the estate if it’s still not been handed out.
We're a couple married in gained goods regime, must we both claim?
If the mortgage was signed by the marriage, both parties must present the claim.
Why claim with RD Asesores?
Because we win
Because we know how to recover your money, our results back that up.
Because you’ll receive a personalized treatment, you won’t be one of thousands of clients.
Because your claim will be presented in two weeks and you won’t wait months.
Because our tariffs are very competitive, we only get paid if you do.
And because we offer all of this with a high degree of quality and professionalism.
What documentation do I need?
- – Power of attorney
- – Professional work order for RD Asesores
- – RD Asesores questionnaire
- – Mortgage Escritura
- – Binding quotation sent to you by the bank (if one exists)
- – Bank extract of the mortgage payslips
- – Amortisation table of the mortgage (this can normally be obtained online)
Also it would be useful to add:
- – Claim to the banks customer attention service (if one exists).
- – Claim to the Bank of Spain (if one exists).
There may be other documents that could replace those above, but it must be the lawyer who judges that.
How much does it cost?
- – Without provision of funds, we only charge if the claim is succesful and at the end of the work.
- In court claims: We charge 10% + IVA of the total amount saved by the client.
- Out of court claims: We charge 7% + IVA of the total amount saved by the client.
- The amounts saved by the client are separated into two separate concepts:
- The difference between what’s been paid up until the date in foreign currency minus the amount that would have been paid had it been referenced to the euro.
- The amount saved by the client using as a base the remaining debt at the date, referenced to the foreign currency, minus the amount remaining one the mortgage is referenced to the euro.
- The payment of said amounts can be made in up to 10 consecutive monthly quotes to be paid in the first days of each month after the confirmation of the sentence.
- The amounts saved by the client are separated into two separate concepts:
- If the bank is condemned in legal costs, they would be paid to us.
What are the legal costs?
It’s an amount of money that’s quantified by the court, depending on the claim amount, to cover the costs of the lawyer and the solicitor that the winner has had to pay.
When is a conviction in legal costs?
The conviction in legal costs is when the judge sides completely with the winning party of the trial
Can I be convicted to pay legal costs?
Ever since the Supreme Court’s sentence in December 2015 it’s practically impossible to lose a case, which makes the chances of being convicted to pay legal costs extremely low.
What services do these rates include?
- Lawyer services
- Complete processing of the claim, in or out of court, in all instances up until the Supreme Court, including enforcement costs.
- Telephone and email attention, along with in person service to prepare the trial if necessary.
- Solicitor services. Complete processing in all instances.
Power of attorney
It’s a document that’s signed in front of a notary and that empowers the lawyer and solicitor that will represent you in court.
This document can be signed in any notary office in Spain and tends to be handed to you in the moment and without appointment. It has an approximate cost of 50 €.
We have a model at your disposal that you can take to your notary or we can indicate to you the various notaries RD Asesores work with.
Only companies are obliged to pay court rates. The amount is calculated over a fixed 300 € for amount over 6.000 € and 150 € for claims under 6.000 €, in both cases, plus 0,5% of the amount claimed, as long as your claim is over 2.000 €.
The costs of getting to the location where the services are contracted, telephone calls and photocopies are included.
What isn’t included is the mandatory deposit (between 25 € and 50 €) and the delivery of certified post, messengers and burofax, which the client will have to pay.
Before incurring in any extraordinary cost in the processing of the case, the client will be consulted and will have to agree to the cost.
You can call us on
952 217 346
Plaza Uncibay, 8, 2nd floor, Málaga
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