The purpose of this area is to publicise the contents of RD-Law 6/2012, subsequently amended by Law 1/2013, Law 25/2015 and Royal Decree-Law 5/2017, in order to help families who are suffering from financial difficulties and cannot afford to pay the mortgage on their habitual residence.
The Code of Good Practice establishes a series of measures for those borrowers who meet a series of requirements to be within what is known as the "exclusion threshold", which entitles them to restructure their mortgage debt and to rent in the event of foreclosure of their primary residence (the commencement of which has been or will be suspended in accordance with Law 1/2013).
Banco Santander voluntarily signed its acceptance of these Regulations.
The most important aspects to be taken into account and the correct way to proceed when dealing with an application of this type are detailed below.
The most important part of the statutory provision, firstly, establishes the Restructuring of the Mortgage Loan. This restructuring involves an interest rate reduction, the introduction of a grace period and the extension of the repayment period.
In order to undertake such restructuring, the CGP provides a procedure that is aimed at financial viability, detailing 3 measures (1st Restructuring. 2nd Removal. 3rd Assignment), and a right to rent in the event of foreclosure on the primary home, being the main features**:
The CGP is designed to provide assistance to all those families who are experiencing financial difficulties and are unable to meet their mortgage payments for their primary residence and are in a particularly vulnerable situation. A number of personal requirements (family, financial, etc.) and objective requirements (contractual) set out in the regulation must be met in order to qualify for CGP measures.
The Royal Decree outlines the viable restructuring of debts secured by the debtor's primary residence that is within the exclusion threshold. The procedure applies* to customers who are natural persons and who have entered into a loan or credit agreement with the Bank secured by a property mortgage on their primary or habitual residence, in existence on the date of entry into force of Royal Decree Law 6/2012, as well as those entered into after that date and which are included in the exclusion threshold in accordance with the requirements defined in the regulations.
The following are the main requirements** needed to find out whether or not you are eligible for CGP:
- 1 to 6: To implement the restructuring measures.
- 1 to 7: To apply the measures of removal, assignment and social housing rental.
- Contract. Loan or credit agreement with Banco Santander.
- Main residence. Guaranteed with a property mortgage on the habitual residence.
- Purchase price. The acquisition price of which does not exceed the values set out in Annex 1.
The mortgage holder will be considered to be within the exclusion threshold when circumstances 4-7 exist.
MORTGAGE HOLDER'S CIRCUMSTANCES
- Income. Income of the members of the family unit does not exceed:
- 3 times IPREM (A Standard Income Index)**.
- 4 times IPREM: Member with a disability > 33%, dependency or illness that makes him/her unable to work.
- 5 times IPREM: Mortgage debtor with a mental disability > 33%, physical disability > 65%, occupational illness.
- Vulnerability. That in the four years prior to the application, the family unit has undergone:
- a significant change in their economic circumstances in terms of extra difficulty to access housing or
b.- there has been particularly vulnerable family circumstances (large family, single parent with dependent children, family with minors, gender violence, over 60s, disability).
- Stress rate. That the mortgage payment exceeds 50% of the net income of the family unit, , or 40% when one of the members of the family unit has a disability exceeding 33%, causing a situation of dependency or illness that prevents him/her from carrying out a work activity.
- Lack of solvency. All of the following must apply:
- The whole of the family unit have no other means that are sufficient to deal with the debt.
- The property is the only one owned, and that the loan was granted for its purchase.
- The contract has no other guarantees, either personal or collateral.
- In the event that there are co-debtors who are not part of the family unit, circumstances 5 and 6 must be met.
Below there is more information (for further details see the Instructions) on the correct way to proceed when applying for a Restructuring of the mortgage debt:
In order for your application to be processed, you must obtain the full original documentation, as described in the supporting documentation checklist. In order to avoid unnecessary delays, the applicant should be particularly careful to gather together all the necessary documentation and to submit it following the steps in the How to apply? tab and following the guidelines outlined in the Instructions.
The existence of the circumstances that place the debtors in the "exclusion threshold" included in the tab "Who is eligible? must be proved to the bank by presenting the following documents.
- Income received by members of the family unit
- Certificate of income and, if applicable, wealth tax issued by the State Tax Authorities or the competent regional body, for the last four tax years.
- Certificate accrediting the social security benefits, guaranteed minimum income or similar welfare benefits granted by the Autonomous Communities or local authorities.
- In the case of self-employed persons, if they are in receipt of cessation of activity benefit, the certificate issued by the managing body showing the monthly amount received.
- Last three pay slips received.
- Certificate issued by the benefits management body stating the monthly amount received for unemployment benefits or subsidies.
- Number of people living in the home
- Family book or document proving registration as a common-law couple.
- Certificate of registration at the Town Hall concerning the persons registered at the property, referring to the time of presentation of the supporting documents and to the previous six months.
- Declaration of disability, dependency or permanent inability to work.
- Ownership of assets
- Certificates of ownership issued by the Land Registry for each member of the family unit.
- Deeds of sale of the property and of the establishment of the mortgage guarantee and other supporting documents, if applicable, of the other collateral or personal guarantees established.
- Debtor's declaration
- Declaration by the debtor that he/she meets the requirements to be considered as belonging to the
- exclusion threshold, according to the method approved by the committee set up to monitor compliance with the Code of Good Practice (included in the application form).