Summary of the Mortgage Law 2019

Spain is a very curious country. We have about 120,000 laws and regulations and, with that cake whose ignorance does not exempt us from its compliance, we should be able to behave well and not get out of the good way.

If we read the article of art 82.4 of Royal Legislative Decree 1/2007, of November 16, which approves the consolidated text of the General Law for the Defense of Consumers and Users and other complementary laws we will see that it declares. In any case, the clauses that, according to the provisions of articles 85 to 90, both inclusive are abusive:
a) link the contract to the will of the employer,
b) limit the rights of the consumer and user,
c) determine the lack of reciprocity in the contract,
d) impose disproportionate guarantees on the consumer and user or unduly impose the burden of proof,
e) are disproportionate in relation to the development and execution of the contract, or
f) contravene the rules on competition and applicable law.

Forced to assume a contract


It occurs to me to think that almost all the letters of that list are compromised when someone is forced to assume a contract that they do not want, under the conditions established by the entrepreneur’s will, which limit the client’s right to choose, which they can assume an excess of guarantees (for example, home insurance is unnecessary in a flat if there is community insurance because it already covers the reconstruction of the house 100%) and, of course, abduct a potential free market customer for 30 or 40 years is not exactly kind to competitors.

Breach of insurance distribution

Let’s add Article 5.e of Law 26/2006 on insurance mediation that prohibits the bank (as an agent that it is) Directly or indirectly impose the conclusion of an insurance contract. I insist since 2006 (the previous Law, the 9/1992, already prohibited in its article 26.2.g Coercion in insurance mediation, as well as inaccurate or inappropriate information to policyholders, insured, beneficiaries of policies or insurers, considering it very serious fault, So the bank has been foolish for 26 years in breach of insurance distribution legislation for this period.

Let’s complete the absurdity with the knowledge that the Mortgage Directive has been directly applied since March 2016. And that this Directive expressly prohibits the linking of insurance and other products to a loan. However … they have been forgetting that prohibition.

In summary: we will have a new Law that will prevent the linking of insurance to loans but we have a bank that is believed to be unpunished and that operates (at least in this) as authentic outlaw of the American West. Either you sign or you get a patrimonial shot and you run out of that constitutional right to decent housing. Unless you agree to lose your dignity and a lot of money to satisfy your whims.

The new Law, as Paul says, should have an escape route so that the client could leave insurance if it turns out that it is inappropriate for their interests. For this reason, the association presented to the Parliamentary Groups a solution that the Senate incorporated in its proposal: that the insurance could not exceed the term of one year although they could count on the possibility of being tacitly renewed subject to the provisions of article 22 of the Insurance Contract Law. But the honorable Members, in Congress, have decided to set aside the consumer and favor banking.

Unquestionable interest to provide that all insurances

Unquestionable interest to provide that all insurances

If I tell you that the insurance proposed by Good Lender does not cover the content fire if at least 85% of the insured value is not lost while the rest of the market does not apply that rule, it does not protect its customers in the event of uninhabitability or with a Hotel day or with a rental for one year while the house is being repaired, if I tell you that insurance does not cover our lives while we go for a bike ride or if we are taxi drivers or bus drivers while other insurance is protect, if I tell you that … You have to be very ignorant of the Law and the market or have an unquestionable interest to provide that all insurances are equal and that what does it matter if the customer buys the street or the bank.

From the outset would have already called the entire sector a chapter if it smelled a concerted practice in coverages and premiums. But, in addition, there is another very important issue and it seems that we only understand a few, experts in risk management: different people, different families, different habits and ways of life require different insurance. If I have or not art or collections, if I have my technified house or not, if I have neighbors or I live in an isolated house, if my pipes are buried or I have posts for the light to reach my house, yes … Each family generates risks different from another! And there is another fundamental element: