IRPH, the new nightmare banking

The preferential clauses may have a third floor in the serial financial products paradigm of the 'Great Recession' that became a nightmare for customers before it was for the banks. It is the benchmark index of the Mortgage Loans (IRPH) as an index is Euribor, according to data provided by the institutions to the Bank of Spain, applies to more than 760,000 mortgage loans with a total balance nearly 46,000 million.

This clause is about to begin the tortuous path that followed other legal clauses before: The Round Group announced Tuesday that will drive the first lawsuit on the issue carried out in Spain and in which n'exigirà nullity and the return of all interest paid. Although there is no exact figure, totaling billions. Oscar Serrano, lawyer Collective, will bring a lawsuit to court the Financial Users Association (Asufre).
The Group's intention is to Ronda demands by organizations and start with Catalan CaixaBank. Although the scope of IRPH is Spanish, the first collective entities subject to these demands are Catalan. It is expected that after the organization that runs Gonzalo Gortázar the turn of CatalunyaCaixa (now integrated into BBVA) and then Sabadell, which have incorporated many of these mortgages referred to IRPH who signed the CAM and Caixa Penedes. Until now we have won cases in court with final judgments that are considered abusive IRPH, but also have been lost. "The lawsuit is a more effective option, and if done through a consumer association did not pay the applicants costs," says Serrano.
What is the problem IRPH? There are several. This index has existed since 1990 but it was between 2003 and 2005, the euphoria of brick intoxicated banking, its market became popular. Sold to customers with the argument that was more stable than the Euribor rate, which convinced the signatories of mortgages, which often are conservative and do not want surprises with the loan. But according to Serrano, this is not so: "When rates rise IRPH also rises, but when fall, down more slowly."
The rate is fixed by a mean between different interest rates of different loans, but according to the Court of Justice of the European Union was very transparent and manipulable. "There are reports that the Bank of Spain admitted that there were irregularities in the banks when setting the rate," adds Serrano.
Europe, contrary to index
In fact, 2013 was suppressed IRPH boxes and reformulated IRPH Banks after a hard decision of the ECJ. The Round Group understands that these deficits were not resolved by the new index IRPH Entities, which also won customers unilaterally and not negotiated. The calculations are affected with IRPH fixed rate (which was applied after the removal of the boxes IRPH) customers pay an interest of 4% plus the differential. In the case of IRPH Entities, interest is 2% more than the agreed differential. In both cases, the margins are much higher than the Euribor, which is negative since the beginning of the year.
The judgments that are abusive IRPH are clear. "The clause is totally disproportionate than three times the legal interest in 2006 (...) Kutxabank had no reason to set interest so high (...) The national judges are required to leave the application without unfair contract terms so that does not produce binding effects for consumers, "reads the first sentence issued by a provincial court in Spain, which was signed in Alava.
The potential danger for large banks. If declared it would no abusive IRPH, which opens the door, as demanded in the case of ground clauses, a retroactive refund of the interest charged more. But the problem for entities not end there. The judges can not apply an alternative rate mortgage if you ask the question. This means (since there have been cases) that causes the nullity of a mortgage IRPH out free: besides recovering interest paid, the consumer goes to pay only the principal of your loan.
The judicial race is about to begin, and waiting to see how it develops, banks have a new source of tension.
THE KEYS
What is IRPH?
It is a benchmark used to mark the signatories have to pay a mortgage. It exists since 1990 but became popular at the height of the construction boom between 2003 and 2005. Supposedly it was an index that varied less than the most widely used, Euribor. As reported by entities in the Bank of Spain, in Spain there are more than 760,000 mortgages referred to IRPH with a balance of 46,000 million, representing 9% of operations and about 6% of the total balance.
What consumers see the problem?
His was not supposed stability and order, according to the Collective Round raised when it did as Euribor, but when it was down more slowly. The Court of Justice of the EU and the Bank of Spain have questioned the calculation method of IRPH also pointed out that it is manipulated by the entities. Estimates of those affected is clearly higher than Euribor: is between 2 and 4% more expensive.
IRPH still valid?
The year 2013 was annulled IRPH boxes and reformulated IRPH Banks. The Round Group understands that these deficits were not resolved by the new index IRPH Entities, which was imposed without negotiation with customers. In addition, many of these mortgages, which were referred to IRPH were converted into a fixed rate loan.
What the courts say?
There are judgments that consider abusive IRPH and there are others that n'afirmen law. Collective Ronda wants a lawsuit because it has more chance of success because the plaintiffs and is more affordable.
Why worry the banks?
The cancellation of a clause entails automatically as defending consumer organizations that appeal to current legislation, retroactive refund of what has been paid. But as with clauses earth, retroactivity is discussed. In addition, there have been cases where affected by a canceled mortgage IRPH have stopped paying interest only return the loan principal.