It is the legally provided notarial document that tries to respond to an exceptional situation, specifically allowing certain mortgagors (when they meet certain requirements) to defer the payment of their mortgage loan installments for a certain period of time.
The debtor interested in formalizing the moratorium will not have to provide any documentation at the notary's office, since the financial institution will be in charge of managing the whole process.
The following calculator offers the possibility of knowing with a good approximation of the costs incurred by the bank in formalizing a mortgage moratorium.
A mortgage moratorium is a legal instrument by means of which certain debtors who meet certain circumstances determined by law may avail themselves of this figure and thus defer payment of their mortgage payments for a certain period of time.
Thus, legal moratoriums are a remedy approved by law to provide a response by the public authorities to exceptional situations in which, due to disruptive and unforeseeable events of great impact on the economy of a country or region thereof, many people see their domestic and family economy seriously affected, which prevents them from meeting their mortgage loan payment obligations on time.
In view of this, in order to be able to help these people who must face these exceptional circumstances, and thus avoid that, faced with the impossibility of paying their mortgage loans, the lending institutions activate the foreclosure mechanisms (which would ultimately lead them, if the situation is not reversed, to lose the ownership of their home), This legal instrument allows the debtors of these loans who have difficulties to pay them, to defer their payment for a period of time (for example, 12 months), thus giving them time for this exceptional situation to end, their economic stability to be reestablished and thus to be able to pay their mortgage loan installments normally again.
<ejemplo>Así pues, en nuestro país, recientemente tenemos varios ejemplos de moratorias hipotecarias aprobadas por Ley para afrontar situaciones excepcionales, como por ejemplo las creadas para afrontar los efectos del Covid, o bien las recientemente aprobadas en octubre de 2021 para afrontar los efectos devastadores del volcán “Cumbre Vieja” en la Isla de La Palma.<ejemplo>
As indicated in the preceding question, mortgage moratoriums are a legal instrument, created by means of a specific Law, whose purpose is to provide a response by the public authorities to certain extraordinary and unforeseeable situations that cause a great negative impact on the economy of a country or specific region thereof, thus causing serious financial difficulties for many families to face the payment of their mortgage loans.
In view of the above, in order to avoid that by not being able to pay these loans, many families may be forced into a foreclosure process (which would ultimately lead them to lose their homes), the legislator, with this mortgage moratorium measure, introduces an instrument that may be used by those persons who meet the requirements established in the regulation, allowing them in such case to defer the payment of their mortgage loans for a certain period of time, thus giving them a margin of time for this extraordinary situation to cease, so that they can recover their income and work occupations with which to face again the repayment of their mortgage loans.
In practice, the mortgage moratorium involves a mortgage novation, that is, a modification of the initial mortgage loan contract, introducing in it what is legally called "waiting", that is, a period during which a debt is "frozen", so that the debtor, during that time (for example 6, 9 or 12 months), must not pay any amount to its financial institution, after which, at the end of that period, the payment of the mortgage debt will be resumed.
<ejemplo>Así pues, por ejemplo, si Juan es un hostelero, propietario de un bar, que a causa de las restricciones del Covid ha tenido que cerrar su establecimiento varios meses, con lo cual, de la noche a la mañana se quedado sin ingresos, de modo que no puede pagar el préstamo hipotecario de su vivienda, gracias a las moratorias, si se acoge a ellas y cumple los requisitos, durante un plazo determinado de 12 meses, no tendrá que pagar su préstamo, con lo cual, ello le permitirá mantener su economía familiar de un modo mucho más holgado, hasta que transcurrido este periodo, pueda volver a abrir su negocio y recuperar sus ingresos habituales.<ejemplo>
As has been seen in the preceding questions, the answer to this question can only be negative, since, as has been indicated, mortgage moratoriums are instruments that the legislator creates ad hoc to respond to exceptional, unforeseeable and specific situations that affect the economy of a country or region in general, and it is not possible to take advantage of a moratorium at any time and under any circumstances.
Thus, only when one of these exceptional and unforeseeable circumstances of great impact occurs (as happened with the Covid pandemic or with the eruption of the "Cumbre Vieja" volcano in La Palma), and the legislator creates a specific law approving a mortgage moratorium, in such case it will be possible to avail oneself of the same, and provided that the debtor meets the requirements of necessity established in said law.
As a general rule, in the event that an extraordinary and unforeseen situation occurs, which has a large and widespread negative impact on the economy of a country or region, so that the legislator approves a mortgage moratorium, experience shows that not all debtors will be eligible for such moratorium, but only those who meet certain requirements of economic necessity, i.e., only those persons who as a result of this situation of great impact have seen their economic situation seriously damaged (such as the loss of their job, the inclusion in an ERTE, etc.) will be able to benefit from it.).
Thus, for example, in order to be eligible for the mortgage moratorium approved in response to the devastating effects of the Covid pandemic (Royal Decree-Law 8/2020, of March 17), it was established at the time that people who suffered situations of "economic vulnerability as a result of the health emergency caused by COVID-19" could apply for it, consisting of:
In short, as can be seen, when a mortgage moratorium is approved, not just any debtor will be able to take advantage of it, but only those who, in general terms, present a situation of greater difficulty or economic vulnerability.
In fact, as a general rule, mortgage moratoriums establish a maximum term to apply for them, so that if, as a debtor, the necessary requirements are met, this maximum term must be taken into account for the application, since once this limit has been exceeded, we will no longer be able to apply for the moratorium.
<ejemplo>Así pues, por ejemplo, las moratorias Covid aprobadas por el Real Decreto-ley 8/2020, de 17 de marzo, entraron en vigor el día 19 de marzo de 2020, concediendo a los deudores, como plazo máximo para formalizar su solicitud, hasta el día 29 de septiembre de 2020.<ejemplo>
When a mortgage moratorium is approved, the first thing a debtor who wishes to take advantage of it must do is consult the regulatory regulation and verify whether he/she meets the requirements established therein in order to be able to take advantage of the approved measure.
If this is the case, the debtor should go to his financial institution and request the possibility of availing himself of the moratorium in question.
After this request, the financial institution will study it, and once it has verified that the requirements established therein are met, it will grant it if appropriate, in which case, the debtor and its institution will sign a series of documents detailing the characteristics of the novation agreed under this moratorium.
Once the financial institution has approved the application, the client must go to its office to sign two documents, that is:
First, a document explaining the novation, which will contain simplified information about your loan (outstanding principal, repayment term, interest rate, etc.) as well as the main features of the moratorium to be applied.
And also, a document of responsible declaration by virtue of which, the debtor authorizes and delegates to his bank all the necessary steps to make the novation public as well as to achieve its registration in the Property Registry.
Once the client has signed with his bank the documentation for the novation under the mortgage moratorium, the bank will normally send it to an agency he trusts, so that it can manage the whole process on his behalf.
Therefore, this agency will send all the documentation to the Notary's office designated for the management, so that the mortgage novation deed can be signed.
Once the entire file has been received at the Notary's Office, it will carry out the following actions:
No. As indicated in the preceding question, the debtor of the mortgage moratorium does not have to go to the Notary to sign the deed of novation, since by signing the documents with his bank, he has already delegated the bank to carry out all the formalities on its own.
The cost is borne by the financial institution, so that the debtor does not have to pay anything.
It will depend on the celerity of the entity in processing the file, sending it to the Notary, etc., but so that the interested parties have an approximate idea, at present, from the time the debtor signs the acceptance of the moratorium with his bank, until it is registered in the Property Registry, thus concluding the process, an average of six months usually elapse.
In daily practice, it can be seen that most of the deeds of moratorium are registered without any difficulty in the Land Registry.
However, if it is necessary to point out a circumstance that sometimes generates problems, they are those cases in which the debtor and his bank, previously, have formalized some type of mortgage novation (to alter the interest rate, the loan capital, the repayment term, etc.) and this has been formalized in a private document without being registered in the Property Registry. In these cases, as there is a discrepancy between the registered mortgage loan and the one that is really novated with the moratorium, a problem of successive registration tract occurs and the Land Registry rejects its registration, in which case it will be necessary to register that previous novation, so that it is possible a posteriori to also register the moratorium that is now formalized.
The main advantage of mortgage moratoriums for banks is that in these cases, the law approving the moratorium is usually accompanied by additional rules or criteria of the banking supervisor, by virtue of which they are allowed not to compute these operations as non-performing loans, so that they do not need to make provisions to cover possible losses on these credit operations, This is also very beneficial for the banks, since the operations covered by this umbrella (that of the moratoriums) do not consume capital, do not reduce the results for the year (since, as mentioned above, it is not necessary to provision them in the same way as if they were an ordinary unpaid loan) and likewise it is not necessary to activate the entire legal/judicial foreclosure mechanism in the event of non-payment.
Also, of course, the wait granted (remember that during 6-12 months the debtor will not pay his loan), allows the debtor to recover from the impact suffered by this extraordinary situation, so that once the situation is over and his income is recovered, he can continue paying his loan, thus the bank recovers its capital, which is ultimately what it wants.
In case of doubts, the client should contact his financial institution, which will provide him with all the necessary information on the status of his file, and not the notary's office.
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