On June 16, the so-called New Mortgage Law came into force, which is included in Law 5/2019 of March 15.
It has been quite controversial since its publication and, even before, during its elaboration, given that the first versions of the Preliminary Draft date from mid-2016, and until the last moment it has triggered different problems for its application, as has been reflected to date before its entry into force, given that the majority of the Financial Entities did not yet have the corresponding platform with the minimum requirements demanded by article 14 of the Law, which caused a transitional period to be established in this regard until next July 31.
Next, we will detail the main novelties of this controversial Law.
free choice by the “consumer” (client who is involved in the mortgage loan on his home) of the Notary where the operation will be signed.
The Notary chosen by the consumers will have to draw up an act, for a minimum period of 10 days from the reception of the operation, once he has met individually with all the holders, guarantors and/or mortgagors of the loan, and has explained all the conditions of the binding offer that the Financial Entity has issued to them. The most important point of the minutes will be collected in the test that each Notary will give to the clients so that they can answer about their knowledge of all the aspects of the binding offer, such as: the free choice of Notary, the characteristics of the loan repayment , if it is a fixed or variable rate, the commissions to be applied to the loan, the consequences of non-payment, etc.
If the Entity decides to link the interest rate to be applied to the mortgage loan, to the contracting of products that the clients had with the Entity, said link cannot be forced to be with products of the Entity itself, or any of its group, if not, that, if the client has contracted this product with any other company, the Entity will be obliged to apply the corresponding discount.
Customers will have to choose whether they want a period of 3 or 5 years so that the Entity can charge a commission for a partial or total cancellation of the loan, being 0.25% in the first case and 0.15% in the second. As of that date, the Financial Entity may not charge any commission for partial or total installments of the loan.
All expenses necessary for the deed and subsequent registration in the Registry, of said mortgage, will be borne by the Bank.
Execution in case of non-payment. In this section, default interest is limited to remunerative interest plus three points. In addition, the new Law prevents the mortgage from being executed if there has not been a minimum of 12 installments.
For all that has been said, and while the regulation that regulates this entire Law is not carried out, the phrase should be applied: “the Law confuses, the regulation, comforts”, given that today, there are more shadows than lights , those that accompany this new Law.