Can you claim if the mortgage origination fee is very abusive?

In the complex world of mortgages in Spain, the origination fee has been the subject of debate and controversy. Have you ever wondered if you can claim if you consider that the mortgage origination fee is abusive? Explore your rights as a consumer and how you can protect yourself against unfair practices by financial institutions. Find out how to take action to claim your rights. Read on!

First, what is a mortgage origination fee? 

Nowadays, many Spaniards acquire property for both personal use and investment purposes. One of the most common methods of financing these acquisitions are mortgage loans.

The mortgage origination fee is an essential concept in the process of applying for a mortgage loan. It represents the amount that banks charge customers at the beginning of the loan. 

This commission is applied as a single payment. It is used to cover various administrative procedures that the financial institutions carry out to formalize the mortgage contract.

You will find this fee detailed in the loan deeds, generally in the fourth clause. However, the mortgage origination fee and its structuring may vary. 

Generally, the origination fee can be expressed as a percentage of the principal granted. This is typically between 0.5% and 1%. It may also be set as a fixed amount.

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Is it advisable to file a claim today?

Until now, the mortgage origination fee was not considered in origination fee claims. Due to the lack of consensus on its abusive nature.

However, the latest ruling issued by the Court of Justice of the European Union (CJEU) changed this decision. It is now feasible to claim the restitution of a mortgage origination fee in specific cases. That is to say, those that have not gone through the due controls of abusive clauses, as required by the European Directive 93/13.

It is essential to highlight that this action does not have a time limit, so there is no pre-established deadline to file the claim. Regardless of the date on which the loan was formalized, you have the possibility to carry out this process.

Staying informed about legal changes and new court precedents can be key to making informed decisions. Because it is key to protect your rights as a consumer with respect to the mortgage origination fee. 

When is the origination fee on a mortgage loan considered abusive?

Can be considered abusive according to the CJEU when it is applied without transparency. But also when it does not correspond to the services provided.

This occurs if the bank does not provide clear and detailed information about this fee in the loan clauses. That is, when the mortgage origination fee is not adequately explained to the consumer. In these cases, it is possible to claim the full reimbursement of the commission for abusive mortgage clauses 2023. 

To initiate the complaint process, the consumer must send a letter to the customer service of the financial institution. This would be the one that provided the mortgage and charged the origination fee.

The bank has a period of two months to respond to your mortgage origination fee claim. In case of lack of response or refusal to reimburse, the user can file a lawsuit if he so chooses. Read the key points about abusive mortgage clauses 2023 below:

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Do you require assistance when claiming the mortgage origination fee?

When it comes to mortgage origination fees, we generally find a key clause. It is the one that imposes the total payment of such expenses on the client. Generally, it is found in the fifth section of most mortgage loan deeds.

However, if the bank did not make a distribution of these expenses, you have a choice. This is a situation that can occur in some loans after January 2019. But, when it comes to a mortgage origination fee, it is another case. 

Faced with this scenario, you have the possibility of filing a claim to recover the payments. To do so, you will need to have the corresponding deed and the invoices that support each of these expenses.

In relation to the mortgage origination fee, this information is generally found in the fourth clause of the loan contract. This clause establishes the amount that the bank will charge at the beginning of the contract, either as a fixed amount or as a percentage of the capital loaned. 

If you wish to request the cancellation and refund of this commission, you will need to provide the following information:

• A copy of the deed
• Proof of payment of the mortgage origination fee. Generally, the first movement in the mortgage account, coinciding with the date of signature of the deed.

It is important to note that, unlike the origination fee, not all borrowers have had to pay the mortgage origination fee.

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It is essential to know your rights and options when it comes to mortgage origination fees in Spain. If you consider that you have been a victim of abusive practices by a financial institution, do not hesitate to complain. Defend your interests.

Real estate management advice can be of great help in navigating this process and making informed decisions. Don’t wait any longer, ask for advice now and make sure you are protected in your mortgage!