Here you will find news, views, events and information relating to real-estate in Spain.

Mortgage Clause Claims Exceed Expectations

The courts are overwhelmed by the number of claims
The courts are overwhelmed by the number of mortgage clause claims

Courts are overwhelmed by amount of claims

The provincial courts that were created at the beginning of summer to handle the barrage of lawsuits against banks for abusive mortgage clauses are receiving around 1,000 cases per day.

According to the data handled by the General Council of the Judiciary (CGPJ), between January 1st and November 5th, the 54 courts have registered a total of 118,419 cases. Taking into account that the month of August sees the judicial world take a holiday, each month has seen an average of 30,000 new cases.

Madrid has seen more cases than the rest of the country with over 25,000 claims. Barcelona, Sevilla and Valencia are next but very far from the number seen in Madrid. Barcelona has received 10,362 claims. In Sevilla there are 5,745, while Valencia is dealing with 4,719. Those four provinces alone amount to over 46,000 cases, 39% of the total. However, the number of active cases is not the most interesting point. What does raise eyebrows is the low number of judgments passed.

So far there have been 3,485 judgments made. However, only 8 courts have issued more than 100 since the start of the year. In order, they are: Asturias (556), Madrid (245), Vizcaya (228), Zaragoza (180), Valencia (162), Las Palmas de Gran Canaria (149), León (140) and Alicante (117).

Other provinces such as Barcelona, Seville, Murcia, A Coruña, the Balearic Islands and Málaga have moved much more slowly. They have passed between 8 and 76 judgments. Murcia is one of the six provinces whose specialized court has resolved less than 10 cases since the summer. Also on the list are Huelva (4), Teruel (9), Segovia (8), Cuenca (2) and Tarragona (5).

Judgments Vs Claims

The results vary if we look at the percentage of sentences issued against the number of claims received. In this case, only three courts have responded to more than 10% of claims. They are Asturias (25.85%), Álava (14.18%) and Lugo (11.86%).

Among the courts who have so far responded to fewer than 10% of received claims are Castilla y León (Burgos, León, Palencia, Soria and Zamora), Ciudad Real and Teruel. All of these have resolved between 6% and 9% of the cases they have received.

More worrying is the national average which is only 2.94%. There are some provinces which haven’t even managed to reach that figure. These include Malaga (0.32%), Seville (0.71%), Santa Cruz de Tenerife (0.99%), Barcelona (0.72%), Madrid (0.96%) and Murcia (0.35%).

This has caused a request from Judges who have demanded that the CGPJ strengthen these courts so that they can expedite the processes and issue sentences with greater speed than currently.

Courts “Overwhelmed”

“The number of claims has overwhelmed all the forecasts made by the General Council of the Judiciary, to the point that the vast majority of specialized courts throughout Spain are saturated with issues, with numbers impossible to be handled by the judicial offices,” they explained. The judges added that the situation is one of “complete clogging”, which will cause the resolutions to take longer “frustrating the resolution of the claims filed by the citizens for their belated response”.

And we cannot forget that these courts are responsible for receiving all claims, from banking clients to financial institutions, for the imposition of abusive clauses in their mortgage loans which had led them to pay more than they should have. Among the most frequent abusive clauses which clients are claiming are the floor clause (cláusula suelo), the early maturity clause, the multi-currency mortgages or the mortgage formalization expenses.