Do you know about the Code of Good Practice for the protection of mortgagors experiencing financial hardship?

24/02/2022

Since 2012, the Code of Good Practice for the protection of mortgagors contains the measures that institutions must apply to help families experiencing difficulties paying their mortgage.

Financial institutions that have voluntarily adopted the Code are obliged to apply the measures set out in it. In order to be eligible, you must meet a series of conditions. The main conditions are:

• Naturally, your bank must have adopted the Code.
• The guarantee of the mortgage loan must be the debtor’s main residence.
• The house purchase price must not exceed €300,000.
• Certain economic requirements must be met, which the regulation calls the exclusion threshold.

Once the formalities have been completed, and if you meet the conditions, your bank will apply, in stages, the measures set out in the Code of Good Practice:

• Firstly, it will try to restructure the debt.
• If this is not possible, it will offer you, always on a voluntary basis, a debt reduction.
• If your bank has not applied any of the above measures, you will be able to request dation in payment.