On December 2010, Section 2.a of the Provincial Audience of Navarra dictated a pioneering judgment in the State that affirmed a judgment of First Instance Court of Estella. This sentence stated that the allocation of a house from the BBVA was sufficient to pay the debt. The news spread quickly in the media, announcing that a Provincial Audience had applied dacion en pago. In reality it is not as such, since dacion en pago can only be done when the affected person is still the owner. On another hand, no judge can alter the actual procedure of execution. So then, in reality, the executive procedure would have been developed according to the current law and the BBVA would have allocated housing in a null auction and for 50% of its value.
When the BBVA intended to use the privilege given by the law to keep claiming the debt not formally covered by the 50% of the allocation value, the judge rejected this claim. To do it, the court reminded that, according to Article 3 of the Civil Code, "the rules must be interpreted according to the real time in which they should be applied" and the claim by the financial institution to keep chasing after the debt in the actual context of the crisis would constitute an “abuse of rights”. This was true especially because 1) the entity had done the appraisal of housing for a value much higher than the pending debt and now could not ignore this appraisal 2) the financial institution incorporated the housing to its assets not for the 50% but for the value of its appraisal and 3) financial institutions in general have a direct responsibility in the actual crisis, and if the housing in this moment had any inferior market value, it was directly attributed to the bad management of these institutions.
On September 2011, almost a year after the Navarra judgment, Section 2.a of the Provincial Audience of Girona accepted the right of appeal against the First Instance Court number 1 of Girona’s decision to continue with the procedure once the house was taken over by the bank. In this case, it did not ratify a decision by the court, but rather accepted the right of the affected person against the enforcement of the remaining debt, paving the way for all attorneys to have recourse against the orders of seizure subsequent to the auction.
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In this case, the Audience also considered an "abuse of right" the aims of Deutsche Bank to keep claiming the debt, when this institution had incorporated the house into its assets for a superior amount, which would provoke an "unjust enrichment”. The resolution recalled that mortgage loans are contracts of adherence that, in a strong part, the bank cannot change the terms (the appraisal, among others), which is agreed upon in writing. Secondly, the judgment established that to continue with the foreclosure once the housing.... it could be considered an "abusive clause" and therefore null according to the General Law for the Defense of Consumers and Users 1/2007.
Apart from these two decrees, that have been the most well known and in part the most relevant, given that is has been a Provincial Audience that pronounced it (and therefore a higher court than the investigating courts), there have gradually been a trickle of similar statements throughout the country. Among this trickle, the following stand out: Section 2.a of the Provincial Audience of Ciudad Real (January 2011); the First Instance Court no.44 of Barcelona (February 2011); First Instance Court no. 3 of Vinaroz (March 2011); First Instance Court no. 5 of Elche (July 2011); First Instance Court no. 5 of Lleida (December 2011); Investigating Court no. 3 of Torrejón de Ardoz (January 2012); First Instance Court no. 3 of Arenys de Mar (February 2012); First Instance Court no. 1 of Mataró (February 2012); First Instance Court no. 8 of Valladolid (March 2012). And when this book is published, we can surely add more.
What these sentences say is not that one does not have to answer for loans taken out. Indeed, the very idea of a loan would make little sense within an obligatory responsibility towards it. What must be able to be proposed is that this responsibility be limited to some exceptional cases, in which an unexpected and involuntary cause resulted in the inability to pay. On another hand, what is unacceptable is that there is an arbitrary award value that involves condemnation of the weaker party and exonerates any responsibility of the stronger one.
The judicial world mobilizes
These sentences that, in a certain way, apply an indirect version and a posteriori of dacion en pago, mostly highlight the sense of unease or discomfort among many judges and legal professionals with a procedure that causes serious injustices. But apart from these decrees, there have been other actions.
Perhaps one of the best known is the question of unconstitutionality raised by the First Instance Court no. 2 of Sabadell. In September 2010, judge Guillem Soler proposed his suspicions to the Constitutional Court that the foreclosure procedure could be unconstitutional: at the very least by violating the fundamental right to effective legal protection, the right to decent and adequate housing and the principle of interdiction of arbitrariness in the performance of the public authorities. In July 2011, the Constitutional Court responded by filing a complaint, claiming that it was not its jurisdiction, but of the legislator.
Another action in progress is the ruling by Judge J. M. Fernandez Seijo before the Court of Justice in Luxembourg. Starting from the demands of one of the affected whom, having suffered both the foreclosure and eviction, asked for the annulment of three potentially abusive clauses that could have been the triggers for his insolvency and subsequent implementation. The judge posed to the European Court that the Spanish mortgage procedure could be violating the rights of consumers listed in the European Directive 93/13/CEE. The issue has been accepted for processing and the Court will listen to the plaintiff, the financial institution, Spanish State and other States before deciding.
Outside of the courts, important professional associations such as Judges for Democracy have issued some convincing press releases in which they have clearly positioned in respect to the necessity of a mortgage legislation reform that must be obligatory and not voluntary for financial institutions. Carlos Castresana, district attorney of the Supreme Court, issued very harsh statements last March 2012, denouncing the "bleeding inequality" that foreclosures cause. Castresana urged the government to regulate dacion de pago, at the same time that he put forth the need to establish a rescue fund for families, in the same way that the State has done with the banking sector. His intervention concluded recommending citizens to be mobilized for the defense of their rights.
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