Banks and government clash in home protection due to rise in mortgages

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Negotiations between the entities and Economy are getting muddy for the various proposals on the table to extend the current rule

The talks between the Ministry of Economic Affairs and the banks regarding the approach to the revised Code of Good Banking Practices so that the most vulnerable households can have to deal with the repayment of mortgages after the rise in the Euribor. The exchange of proposals is maintained between the two parties without any signs of a final agreement as yet. In fact, according to sources in the negotiations, it is the technical teams working on the various possibilities that are on the table without catching a glimpse of “high” meetings to announce an agreement in the coming days.

The biggest stumbling block concerns one of the most important aspects of this new regulation: which families will have access to the financial facilities that the new code will contain; and what measures can be taken, in addition to those included in the current Debt Restructuring Action Protocol, which has been in place since 2012.

What is being valued is precisely an adjustment of the mortgage debt that allows it to be extended to five years, so that the mortgage holders can now cope with the rise in the Euribor -with installments that do not skyrocket- in exchange for their loans that last longer. In addition, another idea is appreciated, CaixaBank’s proposal to freeze the mortgage payments of families with more economic difficulties for 12 months. Although in this case not all entities agree.

Another part of the bank maintains the proposal to maintain an income limit of 24,318 euros per year (three times the IPREM index in 14 payments over a year) to access these financial facilities. Although that amount could be increased to accommodate more families whose budgets have been impacted by the sudden rise in interest rates during this year.

The President of the European Banking Authority (EBA), José Manuel Campa, is in favor of the banking sector first “cautiously” approaching the deterioration of the economic environment and its impact on results, then offering “work on a case-by-case basis” alternatives.

The calendar is progressing against the financial entities whose executives wanted the agreement in place before the presentation of their quarterly results. Time is short, because Santander will make the bills this Wednesday; Sabadell and Unicaja will do that on Thursday; and CaixaBank and BBVA will wrap up the round on Friday. They hoped that when the time had come, they would have signed the pact with economic vice president, Nadia Calviño, who is leading the negotiations. Just last week, Calviño himself thanked “all the proposals” from the bank, while “the teams are analyzing them and working intensively to see as quickly as possible which can be most effective.” There is no significant progress after the weekend.

The proposal from part of the sector indicates that the families requesting help will also have to demonstrate that the financial burden of the loan is at least 40% of their net income. At the time of the application, they will have to prove their financial and property situation by submitting documents such as the last three pay slips, an income certificate or the income tax and VAT return in the case of self-employed persons, in addition to family and registration documents. and property records issued by the property registry.

In order to access this measure, which is valid for one year for mortgages taken out from 1 January 2012, the beneficiaries must meet a number of requirements. To start with, your rate has become more than 30% more expensive due to the increase in the Euribor. Something that, judging by the behavior of the indicator, could easily happen in the loans under review.

Meanwhile, the Euribor does not stop giving respite. The main mortgage indicator rose again this Monday in the overnight interest rate to 2.73%. With one week to go before the end of October, the monthly average is above 2.6%. A year ago it was -0.47%. Negative.

Source: La Verdad

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