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Arrecife Judge Annuls Mortgage

Tuesday April 9, 2013

Arrecife Judge Annuls Mortgage

An Arrecife judge yesterday annulled the mortgage agreement between the bank BBVA and a family resident in Lanzarote, stating that the level of interest being charged on the loan was nothing short of usury.
 

Judge Juan José Cobo declared that the mortgage which had been used to purchase a property in Lanzarote in 2006 was now null and void. The matter had been taken to court as the family were contesting eviction from the property on 3rd May this year, due to non-payment of the monthly installments.
 

He was particularly strong in his condemnation of the interest on the loan being charged at 19%, a level he considered ‘abusive and usurious’. The main holder of the mortgage had lost his employment through no fault of his own and had been unable to find anything that would bring in an adequate salary to cover the mortgage.
 

The judge went further, stating that the financial bodies were responsible for creating the crisis by making loans that were unsustainable, leading eventually to the market crash and subsequent recession. There was no justification for this type of aggressive selling other than the enrichment of these financial institutions.
 

In a separate meeting at the Lanzarote Cabildo, the corporation approved a motion at an ordinary session to adopt the necessary measures to avoid evictions for those residents who have fallen behind with their mortgage payments. The local pressure group, Platform for those Affected by Mortgages (PAH), has been lobbying the government to assist residents who face being forced to leave their homes due to economic reasons. Across the Canaries last year, 2,193 evictions took place, an average of 24 per day. A number of measures were agreed, including a demand that financial institutions ensure transparency in the conditions that are applied to mortgage loans, especially in relation to insurance against unemployment or payment protection.
 

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