Banco Santander signs Code of Good Practice on protection of low-income mortgage borrowers

1. Press Release
Banco Santander signs Code of Good Practice on
protection of low-income mortgage borrowers
 The bank will also maintain the moratorium on mortgage repayments announced in
July, 2001, which has provided solutions to 9,820 families with mortgages of EUR
1.634 billion
Madrid, March 13, 2012 - Banco Santander has decided to adopt the Code of Good Practice
approved last Friday by the Spanish government, which includes the Royal Decree-Law 6/2012
on urgent measures to protect mortgage borrowers, as published in the Official State Bulletin
on March 10. These norms provide for the voluntary adhesion of financial institutions to the
Code with the goal of easing the economic and social circumstances of families below the
poverty line.
Moreover, Banco Santander will continue the initiative it launched at the end of July, 2011,
which provides for a three-year moratorium on mortgage capital repayments, without changes
to the financial terms of the loan and allowing for extending its maturity. The measure applies to
families whose incomes have been reduced or have a member in unemployment. These limits
are being applied with flexibility and the bank is extending the benefits to customers with
mortgages who meet the conditions.
Thus far, 9,820 families have benefitted from the Banco Santander mortgage moratorium,
covering mortgages with a value of EUR 1.634 billion. As a result, these families’ mortgage
payments have been reduced by an average 48%.
The Code of Good Practice sets out a plan for restructuring mortgages of families suffering
extreme economic hardship and are unable to pay the mortgage on their primary residence.
The measure covers families in which members living under the same roof are unemployed
and whose mortgage payment is greater than 60% of the family’s income. To benefit from the
measure, families must meet other conditions, for example not possessing other assets or
wealth with which to repay the debt.
The Code of Good Practice provides for three phases of implementation. The first involves
restructuring the debt in a viable fashion, with no capital repayment for four years and with
interest of Euribor plus 0.25 points, and extending the maturity to up to 40 years. If following
these measures the mortgages payments are above 60% of the family’s income, financial
institutions can assume a part of the repayment. If the family still cannot meet its payments, the
measure provides for exchange of the home as a means to cancel the debt to the bank, with
the provision that the family can remain in the home under a rental contract for two years.
1
Comunicación Externa.
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email: comunicacionbancosantander@gruposantander.com