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Banco Santander signs Code of Good Practice on protection of low-income mortgage borrowers
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 billionMadrid, March 13, 2012 - Banco Santander has decided to adopt the Code of Good Practiceapproved last Friday by the Spanish government, which includes the Royal Decree-Law 6/2012on urgent measures to protect mortgage borrowers, as published in the Official State Bulletinon March 10. These norms provide for the voluntary adhesion of financial institutions to theCode with the goal of easing the economic and social circumstances of families below thepoverty 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 changesto the financial terms of the loan and allowing for extending its maturity. The measure applies tofamilies whose incomes have been reduced or have a member in unemployment. These limitsare being applied with flexibility and the bank is extending the benefits to customers withmortgages 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’ mortgagepayments have been reduced by an average 48%.The Code of Good Practice sets out a plan for restructuring mortgages of families sufferingextreme 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 unemployedand whose mortgage payment is greater than 60% of the family’s income. To benefit from themeasure, families must meet other conditions, for example not possessing other assets orwealth with which to repay the debt.The Code of Good Practice provides for three phases of implementation. The first involvesrestructuring the debt in a viable fashion, with no capital repayment for four years and withinterest of Euribor plus 0.25 points, and extending the maturity to up to 40 years. If followingthese measures the mortgages payments are above 60% of the family’s income, financialinstitutions can assume a part of the repayment. If the family still cannot meet its payments, themeasure provides for exchange of the home as a means to cancel the debt to the bank, withthe provision that the family can remain in the home under a rental contract for two years. 1Comunicación Externa.Ciudad Grupo Santander Edificio Arrecife Pl. 228660 Boadilla del Monte (Madrid) Telf.: 34 91 289 52 11email: email@example.com