Stages in the application process

2.1. Previous measures to the foreclosure: mortgage debts restructuring

Debtors that meet the requirements established on section 1.1.1 may apply for the debt restructuring to reach the viability of it in medium and long term. The restructuring plan developed by the Entity shall consist of the joint application of the following measures:

  • i) Default on capital amortization 5 years.
  • ii) Extending the amortization term to 40 years from the date of the loan granting.
  • iii) Reducing the interest rate to Euribor +0.25% during the waiting period.

In any case, the debtor may at any time submit to the entity a restructuring plan proposal.

Debtors in enforcement proceedings, once the notice of auction has taken place, may not apply for restructuring.

2.2. Complementary measures: removal

If the restructuring plan referred to in section 2.1 is unfeasible –being so in case that the monthly mortgage payment established exceeds 50% the total revenue of the family unit-, debtors may request a removal of the outstanding capital provided they meet the conditions established in sections 1.1.1 y 1.1.2. The entity shall have power to accept or reject such removal.

In addition to the debtor requesting the plan that has result unfeasible, the removal may also be requested by:

  • (i) The debtor involved in enforcement proceedings in which the notice of auction has already taken place.
  • (ii) Debtors complying the conditions established in sections 1.1.1 and 1.1.2 and can not apply to the dation in payment due to the existence in the dwelling of subsequent charges to the mortgage intended to extinguish.

2.3. Alternative measures to the foreclosures: dation in payment

Debtors for whom the restructuring and complementary measures where appropriate result unfeasible and meet the requirements under sections 1.1.1, 1.1.2 and 1.2.2, may apply for the dation in payment for their main residence in the term of 12 months from the restructuring request. In these cases, the Entity is obliged to accept the delivery of the mortgage asset to the own entity or to a third party designed by it, being the debt definitely cancelled provided that:

  • (i) The debtor is not in foreclosure procedures in which the notice of auction has already been taken; o
  • (ii) That the dwelling is not taxed with subsequent charges.

The debtor that requests it at the time of the dation, may stay in the dwelling as a lessee for a term of two years, paying an annual rent of 3% of the debt total amount at the time of the dation. In case of failure in the rent payment, a late payment interest of 10% shall be charged.

2.4. Rental rights in the event of foreclosure on the main home:

Mortgage debtors against whom foreclosure on their home has been suspended in accordance with the provisions of section 1.1 of Act 1/2013, of 14 May, regarding measures to strengthen the protection of mortgage debtors, debt restructuring, and social rental, may apply to rent said property from the foreclosing creditor, or person acting on the latter's behalf, for a maximum annual rental of 3 per cent of its value at the time of approval, determined by means of a property valuation, provided by the subject of foreclosure and carried out by an approved property surveyor. Said rental shall be annual and it can be extended at the will of the lessor, up to five years. On the mutual agreement of both parties, this rental period may be extended annually for a further five years.