Abanca sentenced to restructure a mortgage loan

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The Supreme Court requires Abanca to restructure a mortgage loan under the Code of Good Practice

 

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The application for restructuring the mortgage can not be made subject to the will of the credit institution.

Credit institutions adhering to the Code of Good Practice can be sued in court for rejecting applications disregarding the legal provisions of the regulations which have benefited.

The Supreme Court in its judgment of 9 July 2019 He resolved in favor of the lenders about rejection, by the bank, restructuring a mortgage loan. La entidad, Welcoming the Code of Good Practice, he founded his dismissal two reasons, legally, They did not justify such a decision.

Fact background,,es,Juan Alberto and Paulina filed suit against FTA,,es,Asset Securitization Fund,,es,requesting the declaration of nullity for abusive of the floor and ceiling clauses contained in the novation contract of the mortgage loan of,,es,with the corresponding refund of amounts unduly collected,,es,The Securitization Fund Management Company,,es,Beech,,es,acting on behalf of FTA, he responded to said claim alleging that he lacked passive legitimacy since the entity had no legal personality and that it constituted only a private and open fund and that therefore the passive legitimization corresponded to BBVA as successor of Catalunya Banc that was the Company fund constituent,,es

The 10 March 2006, D. Martin and Ms.. Eufrasia concluded with Caixa Galicia (today Abanca) a mortgage loan for an amount 111.000 euros. In it mortgaged his residence situated in Valladolid.

Late 2013, as a result of job loss by D. Martin, lenders stopped paying dues repayment.

The 9 December 2014, before the mortgage loan defaults, Abanca terminated the contract. Foreclosure also urged that followed in the Court of First Instance No.. 4 Valladolid, under No.. 25/2014.

The 21 July 2014 borrowers submitted to the lender one restructuring proposal under the rules of the Code of Good Practice (regulated by the RDL 6/2012, of 9 March, and Law 1/2013, of 14 May). The proposal consisted of a grace period on repayment 5 years and reduced interest applicable during this period applies to Euribor + 0,25.

Abanca allowed to proceed within one month without answering the proposal.

Martin and Ms.. Eufrasia again require to be uttered.

Finally, the entity answered and denied the proposal. He alleged that the following requirements are not met:

  • that the case opened in the execution of the mortgaged property is enervated in terms of art. 693 LEC with funds of the debtor and,
  • registralmente that subsequent charges canceled the mortgage that was to novar, unless registration record with the novation the bank did not change the range of your mortgage is left.

In the registration sheet they consisted of two subsequent property amounting liens.

The publication of the auction house lenders became the 24 November 2014.

Martin and Ms.. Eufrasia filed a lawsuit against Abanca. They said they were in a situation of exclusion as regulated in RDL 6/2012, of 9 March, and Law 1/2013, of 14 May. They requested that the entity was condemned to accept the restructuring of mortgage loan requested day 21 July 2014.

Abanca opposed the demand. He argued that the restructuring was subject to prior payment of the due and unpaid fees and the cancellation of subsequent charges.

During the proceedings Abanca opposed the concurrence of supervening circumstances which determined the lack of litigious object. This is because the claimants had ceased to be owners of housing subject to foreclosure.

Primera Instancia

The 27 May 2016 the Court of First Instance No.,,es,of Almería dictated auto initiating the phase of liquidation of Construcciones Nativen S.L,,es,the insured initiated payment proceeding against the insurer in the amount of € 161,086.24,,es,the insured filed ordinary lawsuit for the same amount against the insurer,,es,who opposed, alleging the prescription of the action brought against him,,es,de Madrid ruled in favor of the insurer. & nbsp; The judge understood the action prescribed based on the art,,es,LCS that establishes a term of two years,,es,The dies a quo would be the,,es,two years after MELV was able to take action against the debtor,,es,The claim filed,,es,the action was prescribed,,es. 6 Valladolid gave judgment dismissing the lawsuit filed by D. Martin and Ms.. Euphrasia por lack of occurrence object litigioso. He had approved the award of the mortgaged property. And this generated the impossibility that could be granted custody because the plaintiffs were no longer owners of housing.

So good, expressly he condemned the entity defendant to pay the costs incurred by bad faith.

Provincial Court

The lower court decision was appealed against by the plaintiffs.

The 2 November 2016, Section 3 of the Provincial Court of Valladolid gave judgment confirming the decision of the court "estimate the loss of legitimate interest of the plaintiff to the extent that nor is there mortgage loannor borrowers are holders of collateral executed”.

The Court argued that "... it is irrelevant to assess whether the performance of the credit institution was under CBP, namely, If you failed to comply with reporting obligations or communication imposed in the Annex to Royal Decree 6/12, it turns out legally unviable <<reactivate>> the mortgage loan contract executed once the warranty. The debate, therefore, It does not focus on assessing the conditions imposed by the defendant in the process of negotiating the restructuring plan, and its origin ... because It could hardly be more flexible measures apply or remove if the contract is resolved, or interest payment in debt when the property is not part of their heritage

And, He concluded saying in relation to "This allows us to conclude that no purpose this assessment procedure (art. 22 LEC), as the logical antecedent of the measures concerned is none other than the existence of a home equity loan, which is not the case ... in view of the result of the foreclosure proceedings…”.

Supreme Court

The appeal decision was appealed by the plaintiffs on the basis of a single plea: infringement of arts. 2 and 5 RDL 6/2012, of 9 March, amended by Law 1/2013, of 14 May, in relation to art. 22 LEC.

The appellants argued that, once the credit institution had accepted the Code of Good Practice and the plaintiffs were on the threshold of exclusion, this legislation was mandatory,  without cease to be required because after the restructuring would have foreclosed.

The 9 July 2019, the Supreme Court, Civil Division, It delivered its judgment No.. 410/2019 solving the existing litigation.

The Chamber upheld the appeal. I consider that, voluntary adherence by the entity to the Code of Good Practice behaved subject to the system provided for in Annex RDL 6/2012, 9 March. Thus was born a right for borrowers, that met the requirements contained in this Act, urging the credit institution the measures provided for in Annex. Specifically these measures included the restructuring prior to foreclosure and complementary (remove) or substitute execution (payment in kind).

Annex, en su apartado 1, letra a), provided that borrowers "may request and obtain from the entity creditor to restructure its mortgage debt in order to achieve viability in the medium and long term it ".

Moreover, the last paragraph of that paragraph that contained "They may not make such a request debtors who are in an execution procedure, once it has produced the announcement of the auction ".

So, he understood the Chamber, a contrario, If borrowers could apply these measures before the announcement of auction. And, in the case under Litis, That was what happened: restructuring is requested 21 July, months before the announcement of auction (24 November).

Thus, plaintiffs presented in time the application for restructuring mortgage debt and, its content was consistent with legal requirements.

Therefore, was the entity that breached a legal duty to comply with the request and rejected it for two reasons did not justify such a decision.

On the reasons for rejection

First, Abanca objected that in advance should be paid all due and unpaid assessments.

The Chamber indicated that, the existence of due and unpaid dues were not, in law, justification for rejecting the application for restructuring.

Second, the bank objected that should rise before embargoes that were locked after the constitution of the mortgage.

He considered the Chamber that this objection was not admissible. The restructuring plan did not alter the ranking of the mortgage registry. So that, to preserve their collateral the credit institution did not have to demand the lifting of the two embargoes.

Accordingly, the bank could not refuse the request for restructuring relying on those two objections.

Without prejudice to control compliance with the CBP and claims that may arise before the Bank of Spain, the Chamber concluded that "membership by credit institutions to the Code also implies that compliance with some of the obligations assumed legally can be claimed by borrowers…”.

That is why, if the bank disregarded a request for debt restructuring for reasons beyond which they could legally justify, It could be sued. And therefore, condemned to grant restructuring.

Since the request was made in time, the bank was having attended. If the action was brought in time, his prosperabilidad could not be made subject to the will of the entity.

The Chamber concluded, in this case, the subsequent foreclosure did not prevent the court proceedings continue forward. Notwithstanding that, the impossibility of implementing in nature conviction to do, You should opt for compliance by equivalence (compensation for damages suffered).

Conclusion

The rejection of applications by banks adhering to the Code of Practice must be legally justified and can not be left to the free will of the entity accepting the application.

Credit institutions adhering to the Code of Good Practice arbitrarily refuse or accept applications for mortgage loan restructuring. The reasons for its decision must be legally provided.

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