The Supreme Court declares the partial nullity of a multi-currency loan
The so-called Multi-currency Mortgages are a type of mortgage loan in which the payment of the instalments in a currency other than the Euro (Dollars, Yen or Swiss Francs, etc.) is allowed. What is unknown at the time of contracting this type of mortgage is that the fluctuation of the foreign currency when applying the exchange rate to each payment can considerably increase the borrowed capital. Thinking that it is not a slight increase, but can reach up to 50% more on the first instalment of the mortgage loan. In the end, the bank may be held liable for outstanding capital, much greater than the amount initially lent.
This is the case of the recent Supreme Court Sentence. The pending capital of the loan reached more than €404,000, despite the fact that the bank gave the clients a loan of just over €260,000.
The recent ruling of the Supreme Court declares the partial nullity of a multi-currency loan and its conversion to euros using the Euribor as the reference rate. The reason for the decision of the Supreme Court to annul this type of mortgage loan, is based on the fact that these clauses were not subject to individual negotiation nor was the client provided with enough information to understand, not only its grammatical content, but also the correct scope and the risk assumed in said agreement. Without this information, the Supreme Court concludes, consumer clients cannot make informed and prudent decisions, which places them in a clear position of prejudice and imbalance with the bank.
Balms Abogados has always defended the nullity of multi-currency clauses since clients are not aware of the risks, let alone the increase in the cost of their mortgage. These risks are not reported by banks in most cases, by not providing transparent and reliable information on said mortgage modality.
The nullity of the floor clause does not prescribe, therefore you can always request in the Court of your residence the nullity of the same and, claim the improperly charged by your bank plus the legal interests.
Balms Abogados offers the advice of our experts with the maximum guarantee in order to evaluate your particular case and initiate the corresponding claim with a high degree of success.