February 24, 2020. Article by Salvador María. Lawyer Ley 57 Abogados.
IRPH AND MARCH 3rd.
A few days (March 3rd) of the resolution of the Court of Justice of the European Union on possible transparency control (declaration of nullity for abuse) of the IRPH clause inserted in mortgage loans, we want to give a general review before finally the uncertainty about what will happen with this type of stipulation is resolved.
WHAT IS IRPH?
The IRPH is an official mortgage reference, published by the Bank of Spain which is determined through a simple average of data sent by each and every one of the entities that operate in the Spanish market.
That is, values of operations carried out by the Entities with their clients are taken in each period and an average is made with the data provided by the entities.
WHAT DIFFERENCES ARE THERE WITH EURIBOR?
The main difference is its price. Loans referenced to Euribor normally have a higher differential, but even though the index (Euribor) is a lower interest rate, the amount of interest to be paid to the entity is lower with respect to loans with IRPH.
Let's see the following graph:
As you can see the difference with Euribor shows that IRPH has always been above, so a loan with this benchmark will be more expensive.
DO ALL MORTGAGE LOANS HAVE IT?
The answer is no. It is a reference that is rarely used and marketed.
In fact, if we go to official records (Statistical Summary of the Property Registry in Spain) we can see that in the last quarter of last year, only 0.39% of mortgage loans were referenced to this index, while a 57.05% went to Euribor.
This statistic has not always been this way and in the first decade of the century 20% of the loans were "placed" with IRPH among the clients of less theoretical "solvency", or according to the criteria of fulfillment of objectives of each entity.
In hundreds of cases analyzed we didn´t found that the bank explained to the family nothing beyond an alleged "greater stability" (which is false and you just have to see the previous graph to realize, "and a" minor "differential (what which is a hoax because the starting "price" is always higher).
The Provincial Court of Malaga has suspended the procedures in which the nullity of the “IRPH clause” is discussed pending the decision of the CJEU, being its decision of application by our courts, since this Court interprets the Law of the Union European and its resolutions are “binding”.
5.- WHAT CONSEQUENCES WOULD HAVE THE NULLITY OF IRPH FOR MY MORTGAGE?
In matters in which a favorable judgment has been obtained, more than 80,000 euros of overpaid interest have been recovered in a single mortgage.
6.- WHAT DO I DO IF I HAVE IRPH IN MY MORTGAGE LOAN?
I would recommend checking the deeds of your mortgage loan with a professional so that you can advise as adequately as possible, knowing as not all the details that may exist at the time of claiming.
We believe that the form of insertion of this type of index in mortgage loans can be declared void due to lack of transparency. Thus, we have achieved it before, and so we will continue to defend it. (The bad practice in banking management is evident. Another thing will be what Justice finally decides).
The legal platform SOS Vivienda, coordinated by Law 57 Lawyers, has provided a toll-free telephone number, 900 64 92 90, to clarify any issue that may be raised to those affected.