Claims to banks have been common for several years. The successive laws recognizing consumer rights have increased litigation, and around 90% of claims against banks are resolved in favor of the consumer, according to Asufin data. Among these claims, the most successful are those of multi-currency mortgages. What does the law say about it?
Multi-currency mortgages, which anchored payment to a currency other than the euro, are a type of loan that became popular in the years leading up to the 2008 crisis. At that time, loans were linked to “stable” currencies such as yen or francs. Swiss, as explained by Carles Solé, manager of Mortgage Formalization at Tecnotramit.
The main problem with this modality is that, as it is anchored to a foreign currency, it is also subject to its fluctuations, which in practice made the loan more expensive. “Multi-currency offered more affordable interest rates, but in exchange the fluctuation made the loan more expensive,” says Solé.
This sparked a flurry of claims. “The Justice has understood that the multi-currency mortgages were granted without sufficient information, for which reason consumers were harmed,” adds Solé. In this sense, the Mortgage Law was reformulated in 2019 to protect these consumer rights.
In this way, the Mortgage Law establishes that the holders of these mortgages have the right to convert them into euros and obliges the bank to periodically inform the client of possible increases in debt that may occur due to the increase in the value of the currency. “If these provisions are not complied with, the contract will become void,” says the expert. As a consequence, the borrower “can demand that the mortgage be converted to euros,” he adds.
Another relevant aspect is that the claim for multi-currency mortgages does not have any prescription, so it can be established at any time, even for mortgages already amortized.
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