MILLIONS of mortgage holders could be in for a massive payout.

mortgageThe controversial floor clause – AKA clausula suelo – has been deemed null and void by a Madrid judge, paving the way for a big payback for expats and Spaniards alike.

Estimated to be responsible for a whopping 90% of Spanish housing evictions, the minimum-rate interest clause has been costing mortgage holders an average of €3,000 since the mid 2000s.

The latest ruling comes after the European Commission ordered banks to reimburse customers in full, last year.

Paving the way for 2.5 million people to claim compensation payouts, the Madrid ruling could cost banks a combined €1 billion.

But with around 10% of Spanish mortgage holders affected by the hidden interest fee, banks have been reluctant to explain how to reclaim.

However, Costa de la Luz-based lawyer Maria Castro has outlined a step-by-step guide to getting your money back:

Find out if your mortgage has a floor clause

Before taking any action, you need to establish whether or not your contract has a clausula suelo. If you are unsure, seek advice from a mortgage broker or lawyer.

Go to the bank

If you have established you have a claim then approach your bank. You will need to bring your mortgage agreement with you along with a legal letter with reference to recent court decisions.

If/when the bank says no

If not solved by the bank, you will need to approach the Clients Service of the Bank. You can contact them yourself or get a lawyer to do so on your behalf. You need to submit your claim with proof of the clause in your mortgage agreement along with a legal letter with reference to court decisions. They will answer within 60 days.

If Clients Service reject claim

If your claim is rejected by the Clients Service of the Bank then you have two options:

  1. a) Contact the Client Ombudsman service, if the financial entity is among those who have adhered to this system. A legal argumentation is advisable here. It is an organ who works independently to banks. This needs to be answered within two months.
  2. b) Claim before the Bank of Spain. The Bank of Spain is not connected to other banks in Spain and makes an independent decision. They have four months to provide an answer.

If all else fails

If none of the above work and you have exhausted all avenues then a Judicial claim can be made through the courts.

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