The agreement reaches the Council of Ministers without finalizing all technical details. Entities fear that if affected customers are classified as delinquent, they will face difficulties accessing credit in the future
The bank assumes that the mortgage agreement will have consequences for their accounts. Late on Monday and without finalizing all the details, the government announced the agreement with the banks that, among other things, strengthens the current Code of Good Practices for the sector and creates a new one that protects families with rents below 29,400 euros per year to, among other things, freeze their mortgage payment for 12 months.
Economic Vice President Nadia Calviño’s determination to announce the measures as soon as possible led to their approval in the Council of Ministers without finalizing the technical details of the agreement hours before the meeting in Moncloa Closed.
Banking industry sources acknowledged their surprise at the announcement of the pact by the Ministry of Economic Affairs without the final agreement being reached, to which they acknowledge that “we will only adhere if it is positive for the mortgage market, if not then we will we will not sign”.
At the XXIX meeting of the financial sector “Challenges and opportunities of a sector in transformation”, organized in Madrid by Deloitte and ABC, with the participation of Sociedad de Tasación, the CEO of Banco Santander, José Antonio Álvarez, indicated that “we the obligation to help clients thrive and our will to work towards a healthy and strong mortgage market.
However, he acknowledged that there are still elements of the agreement that raise doubts, particularly with regard to mortgage refinancing and the impact this measure may have on the entity’s provisioning and capital consumption.
Álvarez acknowledged that “if we stick to it and sign it, it will impact Santander with technical aspects closely related to deadlines and how affected customers are classified.” As he pointed out, “there is a fundamental problem because once a customer is classified into ‘stage 3’ – the ‘drawer’ where entities keep their delinquent loans – they may have a problem in the future as they will hardly be able to access to credit.” “This is a problem we need to take care of so that there isn’t a de facto percentage of people who don’t have access to credit later on,” he stressed.
From the industry side, they add that the percentage of customers affected by the increase in the cost of their mortgage payments is currently still highly controlled. “In November, we applied the average rate for September, which was around 1.5%-2% for those who have signed variable-rate mortgages in recent years,” they explain.
However, the latter part of the year and the beginning of 2023 may be more complex in this segment. Calviño therefore plans to have the protective measures take effect from 1 January next year. An objective that may be too optimistic given that, as indicated by industry sources, the plan must pass through the boards of directors of the entities before entry.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
