Clifford Chance
Early termination clauses in consumer mortgage loans: the Spanish Supreme Court moves closer to the approach of the banking sector and finds in favour of allowing foreclosure proceedings
14 October 2019
Key issues:
- The Spanish Supreme Court gives the criteria to address the scenarios that had not been covered by the Real Estate Financing Act regarding ongoing foreclosure proceedings based on the early termination of mortgage-secured loans with consumers.
- Ongoing proceeding can continue under certain circumstances (acceleration past 2013 and material breach).
- Financial institutions and NPL acquirers will be able to file new foreclosure proceedings based on the acceleration of the loan, if certain criteria set out by the Supreme Court are complied with.
- The criteria settled in the Supreme Court ruling are only applicable to mortgage-secured loans entered into with consumers.
