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Housing Glossary

You will find information here on all topics relating to housing in Barcelona

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Accrued interest

The interest applied as a penalisation when the debtor does not comply with repayment obligations. The amount must be established in the contract.

Active supermortgage

This allows the client to choose their loan's benchmark index (MIBOR at three months, six months or a year) so that payment can benefit from lower interest rates sooner.

Adaptable instalment

Characteristic of UCI superloans that allow the borrower to not pay one instalment a year for the first three years if there are problems due to holidays, extraordinary expenses, etc.

Advanced cancellation fee

A commission arising from the financial risk involved in the advanced cancellation of an operation. The applied commission compensates the financial institution for its financial losses.

AEDE

Direct state aid for paying the deposit on a property.

Affordable housing

Group of social housing or dwellings from social renovation projects that are sold or rented at below-market prices.

Affordable rent

The cost of renting these dwellings is below market prices after being included in operations concerning the rented flat pool, social renovation or social housing promotions.

Amortisation

Payment made to repay a loan.

Amortisation period

The duration of the loan. The contract establishes the date of the first and last payments. The longer the period, the lower the payments are, but the higher the interest. You therefore pay more in the end. The monthly instalment should not exceed 35% of your net income.

API

Estate agent. A qualified professional who acts as an intermediary between the two interested parties to facilitate the signing of a real estate contract, which can be a rental agreement, a sales agreement or another similar contract. They usually charge a percentage of the sales price as compensation or commission.

Applicant

A citizen who makes a registration application to the Barcelona Social Housing Applicants Registry, and who represents the other members of the dwelling unit included in the application.

APR

Annual Equivalent Rate. Effective annual cost of the mortgage in terms of interest, commissions and the repayment period. To compare loans, it is not enough to just look at the lowest APR, you also have to compare the conditions, the repayment period and the distribution of instalment payments.

Arbitri municipal de plusvàlua

Former denomination of the capital gains tax on landed property.

Assessment

The value of a dwelling certified by a specialised assessment company, in accordance with the mortgage market law. This certificate not only indicates the real value of the property, it also serves as a reference for obtaining the necessary financing.

Authorisation

Document in which the owner authorises the tenant to carry out building work in the dwelling's interior.

Close glossary

Housing offices only offer face-to-face assistance by prior appointment, so check out the “Housing calls you” service here to receive the most appropriate personalised assistance. If you also need assistance in energy rights, book an appointment with an energy-advice point (PAE) by clicking here. On the other hand, if you reside in an IMHAB public dwelling you can consult our contact, management and processing channels here.​

The City Council calls for greater transparency for families who have securitised mortgages

24/01/2017 - 16:22

Mortgage securitisation Full Meeting of Barcelona City Council approves a proposal calling for greater transparency on the information provided by financial institutions regarding securitised mortgages in order to protect affected mortgage holders.

 

Barcelona City Council is promoting new measures to protect families affected by the mortgage crisis and who are at risk of housing exclusion. For this reason, last October, the Full Council Meeting approved a proposal demanding greater transparency from banks concerning securitised mortgages.

Due to the 2008 economic crisis, many banks resorted to what is known as “mortgage securitisation”, a process in which mortgages are sold to third parties in order to reduce risk. The bank therefore ensured payment of the interest paid by the client, but transferred the risk of non-payment to another entity (a company, an investment fund, etc.) which became the owner of the mortgage holder’s debt.

However, many financial institutions securitised their clients’ mortgages without informing them. As a result, thousands of families have been affected by the new conditions of their mortgage contracts, conditions which are often abusive and could result in eviction due to non-payment.

The Full Council’s proposal calls for the legal modifications needed in order to ensure that the affected families have access to clear information and documentation that specifies whether their mortgage has been securitised.

 

Initiative to ensure access to mortgage information

The City Council’s proposal calls for various bodies, financial institutions, the judiciary and public institutions to help in achieving greater transparency and accessibility in the management of information concerning securitised mortgages. The various measures proposed include:

  • Calling on the National Stock Market Commission to act as a real public registry, organising all the official documentation. The aim is for families affected by securitisation to be able to access all relevant information and find out who their mortgage has been sold to and under what conditions.
  • It calls for legislators to make the appropriate legal modifications so that it becomes obligatory to register the transfer of ownership of a mortgage loan in the Property Registry. This would provide more guarantees for affected mortgage holders.
  • The financial entities are requested to make the tangible assets ratio for their securitisation fund public (on their websites, in addition to the fund’s documents and articles of association).

 

This agreement will be communicated to Barcelona’s Higher Court so that, if necessary, the suspension of mortgage foreclosures (evictions) can be agreed until each financial institution certifies whether the loan in question has been securitised or not.

The final objective is for the different administrative levels, within the limits of their competencies, to be able to offer action and protective measures to people affected by these financial practices. In this sense, it also calls for Barcelona Provincial Council and the Generalitat of Catalonia to respond to requests from people under threat of mortgage foreclosure.

 

Mortgage securitisation

Mortgage securitisation came into being with Act 19/1992 concerning both Property Investment Companies and Funds and Mortgage Securitisation Funds.

When someone acquires a mortgage, the bank provides them with money based on certain interest rates. However, in parallel, many institutions begin an extremely complex process of dividing up the mortgage debt into various packages and selling them on secondary markets. The bank aims to ensure the return of the loan without the risk of losing the money while also increasing its liquidity.

In accordance with current legislation, from the moment at which the mortgage holder is no longer able to pay their mortgage instalments, the bank can seize the property and call for the eviction of the people living there. However, in reality, with securitised mortgages, the bank has already sold the loan and therefore is no longer the owner of the mortgage and cannot claim it.

For this reason, various associations of affected people, organisations and institutions such as Barcelona City Council are calling on the State to prevent banking institutions from seizing properties if they have not previously provided information concerning any changes in mortgage ownership.

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