The upper house in Spain has authorized the government of Spain to protect the mortgage holders from unfair financial practices. The Bank of Spain will now investigate the questionable mortgage practices.
The full Spanish Senate unanimous voted to approve a measure by the Popular Party, which calls on the government to take action against what is called unfair mortgage practices. Some credit institution will now feel more pressure from the Bank of Spain to regulate the mortgage market the the lending institutions, reports Finanzas.
In a statement, the spokesman of CiU in the Upper House and promoter of the agreement, Jordi Vilajoana, has concluded that the initiative gives the Bank of Spain, which is already the regulator of the financial system, "more power to protect customers with mortgages."
The Bank of Spain had also earlier prepared a report where it acknowledged that there are clauses in the mortgage contracts that limit the rights of the loan holders. There is lack of reciprocity and some clauses are disproportionate.
The motion requires fulfillment of the Revised General Act for protection of consumers and user that in 2007 had established these exclusions and unfair contracts.
Written by Armen Hareyan
Materials from Finanzas.com and Spanish media are used in this report.
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