The European Court’s response on IRPH mortgages has been announced, which will now lead to a flood of complaints.

Many mortgages in Spain are affected by IRPH (Mortgage Loan Reference Index). This index, unlike EURIBOR, has remained constant and kept rising, making loans more expensive without the possibility of benefiting from EURIBOR’s significant decreases. The IRPH, even today, is two percentage points above, while EURIBOR’s figures remain negative.

The Judgement by the European Court of Justice ultimately establishes that the IRPH will not be excluded from the scope of the European Directive on unfair terms.

This means that the bank’s main argument being “as the well-known index was regulated by the Bank of Spain” “implying that it isn’t considered unfair”, won’t be a solid argument in itself, therefore the Courts will have to analyse case by case whether the IRPH of your mortgage was applied with a lack of transparency.

This much-awaited judgement corrects the current doctrine of the Spanish Supreme Court, with the Courts of First Instance being responsible for the decision, who up until now limited themselves to applying the last Supreme Court’s judgement, which understood that the IRPH index was legal due to it being regulated by the Bank of Spain.

It will be the Spanish Judges who will verify if the banks that used this index informed their customers with transparency prior to taking out the mortgage.

Caixabank, BBVA, Bankia, Santander and Sabadell are the most affected ones. It is estimated that the possible outlays will be considerable, however, the European Court, with this judgement has preferred to stay out and not deliver a decisive blow to the banks.

The affected consumers who have patiently waited for this imminent resolution can now fight their claim with greater guarantees, as each study will be case-dependent, meaning you get the chance to challenge the unfairness of the IRPH index applied to you at the time of taking out the mortgage.

At Pellicer & Heredia Lawyers we encourage you not to ignore the possibility of claiming your money back, we will advise you from the start, study the viability of your claim and negotiate with your bank throughout the entire process.

Ignacio Pellicer & Pedro Heredia

www.pellicerheredia.com

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