10 Common Abusive Clauses in Spanish Mortgage Loans

[Lawbird Lawyer]

Dear Mr Cobb,

You probably hired a Swap to offest the risks of interest rate fluctuations (in this case, Euribor).

This is a complex financial tool devised to act as an insurance should the Euribor climb/decrease too sharply.

The problem with it is that it´s a two-way street. If the Euribor rises steeply you are paid a premium by the insurance company, but if the Euribor rate decreases significantly ( such as now havibng reached a historicasl low) it is you who owes money to the bank.

I was very tempted to include swaps as abusive clauses but at the end I ruled them out.

There are thousands of unsatisfied customers who are now facing huge amounts on having hired these insurances. Many have sued their lenders. There are rulings going both ways. Some label them as abusive and other rulings are in favour of lenders (the most recent ones).

The problem lies in that customers, such as yourself, were perhaps not explained or disclosed fully what they were hiring, particularly what would happen if the Euribor fell dramatically. Swaps are a complex financial insurance that can act as a double-edged sword. When you hire them, you are indeed taking an educated guess or gamble on where the interest rate will be heading next.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt