All customers who are natural persons in a situation of extraordinary difficulty ("exclusion threshold") and are holders of a mortgage or credit on a main residence, whose purchase price constitutes the security of the mortgage or credit and is within the limits established in article 5.2 of RDL 6/2012 (absolute ceiling of €300,000).

The Code provides firstly for the Restructuring of the Mortgage Loan, consisting of:

• a. A five-year grace period on repayments of the principal.

• b. An extension of the debt repayment period up to 40 years from the date the loan was granted.

• c. A reduction of the applicable interest rate to Euribor - 0.10% during the grace period (or fixed rate, if they have one).

• d. The cancellation of the floor clause.

Furthermore, early repayment of the credit or mortgage loan requested within 10 years of the approval of the restructuring plan will not entail any compensation costs.
If the above measure proves infeasible, as a second measure the debtor can request a reduction of the debt.

The third measure is envisaged when the previous measures prove to be insufficient; this is Dation in Payment of the main residence, with a right to rent it, which will have to be accepted by the lending institution, having been requested by the debtor. This measure shall not apply in the event that the property is in foreclosure proceedings where the auction has already been announced, or where the property is encumbered by subsequent liens.

Finally, the right to rent, in the event of foreclosure of the main residence, introduced by RDL 5/2017, will be applicable after a mortgage foreclosure proceeding in which the eviction of the foreclosed debtor has been suspended.

Applicants must meet these criteria:

• a. The total income of the family unit is less than 3 times the IPREM (Multi-Purpose Public Indicator of Income of 14 payments a year), that is, a limit of €25,200. This limit will be 4 times the IPREM if there is a member of the family unit with a disability of more than 33%, or who is in a situation of dependency or permanent incapacity for work. In this case, the limit is €33,600. And at 5 times the IPREM, i.e. a limit of €42,000, if the requesting mortgagor or borrower suffers from cerebral palsy, a mental illness or intellectual disability, with a recognised severity of 33%, is a person with a physical or sensory disability with a recognised severity of 65%, or if the caregiver of the mortgagor or borrower has a proven serious illness that incapacitates him or her from working.

• b. That in the four years before the application is made, the financial circumstances of the family unit have undergone a significant alteration. Specifically, if the burden of the mortgage on the family income has multiplied by a factor of at least 1.5, or if the family unit has experienced supervening family circumstances of particular vulnerability (large family, one-parent family with children supported, a family with minors, gender violence, people over the age of 60, disability).

• c. That the mortgage payment is over 50% of the net income that the family unit receives in total (this will be 40% in some cases of particular disability, dependence or impairment).

  The following requirements must be met only in order to apply the complementary and substitute measures of reduction, dation in payment and rent in the event of foreclosure of the main residence:

  • • The family unit as a whole does not have enough other assets or property rights with which to pay the debt.

  • • The mortgaged property is the only home owned by the debtor(s) and the loan was granted to acquire it.

  • • There is no other security for the loan or credit, either on property or personal. If there are co-debtors who are not part of the family unit, they must be included in the above circumstances.

• a. Documentation on the income received by the members of the family unit (they must present the documentation that relate to their circumstances):

  • • Certificate of income and, if applicable, certificate of having filed wealth tax. This must be issued by the Spanish Tax Authority or the competent body of their Autonomous Community and must reflect the most recent financial year for tax purposes.

  • • Last three payslips received.

  • • Certificate showing the monthly amount of unemployment benefits or allowances received. The document must be issued by the body that manages the applicant’s benefits.

  • • Certificate as proof of receipt of social welfare income, minimum job-seeker's allowance income, minimum wage or similar social assistance aid granted by the relevant Autonomous Communities and local entities.

  • • If you are self-employed and receiving unemployment benefit, the certificate issued by the managing body showing the monthly amount you receive. The document must be issued by the relevant managing body.

• b. Documentation on the number of people living in the dwelling:

  • • Family record book or document as proof of registration as a domestic partner.

  • • Certificate of municipal census registration showing the persons registered in the dwelling. The certificate must cover at least the six months prior to the time when they submit the documents proving that you are at risk of vulnerability and up to that time.

  • • Declaration of disability, dependency or permanent incapacity to work.

• c. Documentation related to the ownership of the goods:

  • • Certificates of ownership issued by the Property Registry for each member of the family unit.

  • • Deeds of sale of the property and of the constitution of the mortgage security and other supporting documents. And, if applicable to you, of the rest of the collateral or personal guarantees constituted.

• d. Certificate of compliance by the debtor(s) regarding compliance with the requirements according to the standard form approved by the commission set up to monitor compliance with the ‘Code of Good Practices’.

  If the Bank is in possession of this information or supporting documentation on any of the above points, as applicant, you need not provide it. However, in order to prove that you meet the conditions for the measure to be granted, you may authorise, expressly and in writing, for information to be obtained directly from the Spanish Tax Authority, Social Security Management Entities and Property and Commercial Registries.

1. a. When the Bank has all the necessary documentation, it will check that you meet the eligibility criteria for the measure and formalising the restructuring.

2. b. The borrowers and, where applicable, the guarantors and endorsers shall sign the restructuring proposal. They shall do so in writing, electronically or by any other agreed system that allows their consent to be validly given. The agreement must be recorded as a public document when, in accordance with the law, it is required to be recorded in the register.

Call us at 900 103 723 or email us at codigodebuenaspracticas@bancsabadell.com.

We also provide you with more information below:

• - Guide
• - Bank of Spain Summary
• - Bank of Spain's Guide with tools for mortgage debtors experiencing payment difficulties
• - Eligibility simulator and application of Best Practice Codes

You can also visit one of our branches, where you'll find full details of any measures to be requested, the supporting documentation to be submitted and the other information.