When hiring a mortgage almost all families opt to do so at a variable rate and linking to the Euribor. But this index is not the only one in the market. The second most used mortgage index in Spain is the Mortgage Loan Reference Index, the IRPH. However, this has been a trap for more than 1,300,000 families . Now comes the first class action against IRPH.
A family with IRPH pays about 200 euros more per month than the one that opted for the Euribor In November 2013, the Ministry of Economy repealed the old IRPH-Cajas and reformulated the calculation method of the IRPH-Banks, renamed IRPH -Entities . The IRPH fixes its value based on the interest applied by the financial institutions on mortgages granted for more than three years, including commissions.
In recent years has quoted around two points above the Euribor. For example, according to data from the Bank of Spain, the Euribor closed in July at -0.056% and IRPH did so at 2.007% after three months of increases. The consequence of all this is that each family that has signed their mortgage with IRPH pays at least 200 euros more per month than the one that opted for the Euribor.
In this scenario, the affected people were soon grouped. After many demonstrations, the first class action now comes. The Association of Financial Users (Asufin) completes the one that would become the first class action in Spain to demand the nullity of the IRPH and the return of the interest charged “in excess” . The association, which includes more than 2,000 people, has argued that the legislation is “absolutely clear” in this regard, so if the IRPH is considered abusive, its effects are “null” from the first moment and corresponds to the return of the money paid as interest.
The boxes imposed an abusive index on mortgages Asufin refers to several judicial rulings that have been given. In 2013, a judge in Collado Villalba (Madrid) suspended the execution of a home for non-payment of the mortgage, considering that the loan contract had abusive clauses. Among the conditions considered injurious to the mortgaged one, the magistrate included the IRPH , the index to which the credit was referenced. The sentence considered it abusive. It was the first time that a judicial ruling considers it so.
This same year, the Provincial Court of Álava annulled in a judgment the IRPH Entities to which the mortgage of a client was referenced and the IRPH Cajas established as a substitute index. The sentence condemned Kutxabank to return , retroactively, all the interest charged on the loan.
“The boxes not only abused the preferred ones, they also imposed an abusive index on the mortgages, the IRPH, which is causing serious damage to families,” denounces Asufin’s president, Patricia Suárez. The association foresees that the demand groups thousands of people affected . To facilitate this, he has created a website dedicated to the demand.
The IRPH reaches the parliaments
Last week ten parliamentary groups of Podemos registered in their respective chambers an initiative claiming to the Government of Spain the derogation of the Reference Index of Mortgage Loans , interest rate that they consider a “big scam” for “abusive, manipulable and opaque”. According to Podemos, banks raise this index to compensate for the drop in the Euribor, which means that people who have their mortgage referred to IRPH “pay more between 200 and 300 euros per month”, since they are at least two points above the Euribor, becoming “in many cases the gateway to eviction.”
The initiative of the purple party has already been approved in Cantabria and La Rioja , in both cases unanimously, and has also been presented in Aragon, the Balearic Islands, the Canary Islands, Castilla y León, Alava, Guipúzcoa, Murcia and the Valencian Community, pending debate .