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moratorium Sectoral applying conditions
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Extension of the deadline for applying for a moratorium Sectoral Agreement and amendment of requirement and conditions
As a result of the COVID-19 crisis, a sectoral agreement was reached by the AEB, which Banca March has signed up to and as a result of which, the option of adopting the Sectoral Moratorium in addition to or instead of the Legal Moratorium1 was implemented.
On 2 December, the European Banking Authority (EBA) approved new guidelines amending and reactivating the previous guidelines on legislative and non-legislative moratoriums. The Spanish Banking Association (AEB), reflecting these new guidelines, has agreed to reactivate the sectoral agreement on extending the financing operations of customers affected by the coronavirus crisis until 30 March 2021, pursuant to the terms indicated below.
1.1 What is the Sectoral Moratorium?
This measure involves paying the interest on the financial transaction, deferring the repayment of the capital.
1.2 Who can apply for the moratorium?
Natural persons (including the self-employed):
a) despite having suffered a reduction in income and payment capacity as a result of the COVID-19 crisis, they did not satisfy the requirements of the Legal Moratorium.
b) having satisfied the requirements of the Legal Moratorium (or even having benefited from or currently benefiting from it), they are interested in applying for the Sectoral Moratorium to extend the term of the Legal Moratorium. In this case, if they originally applied for the Legal Moratorium, this must be reflected in the application for the Sectoral Moratorium.
1.3 What operations are included under the Sectoral Moratorium?
It encompasses all types of loans, credits (including cards) and finance leases.
The affected operations must also satisfy two further requirements:
- They must have been granted before 14 March 2020 and,
- If there have been any defaults, they must have occurred in the past 90 days.
1.4 What is the term of the Sectoral Moratorium?
- For mortgage-backed loans (including real-estate leasing), up to a maximum of nine (9) months. If, prior to the application, you have benefited from one or more of the moratoriums on mortgage-backed loans, whether legal, sectoral or a combination of both, for a total period of less than 9 months, you may apply for an extension of the term up to a maximum of 9 months.
- For other loans (including non-real-estate leasing), up to a maximum of six (6) months. Likewise, if, prior to the application, you have benefited from one or more of the moratoriums on personal loans, whether legal, sectoral or a combination of both, for a total period of less than 6 months, you may apply for an extension of the term up to a maximum of 6 months..
For the purposes of clarification, moratoriums (sectoral or a combination of sectoral and legal) granted in response to applications received before 30 September 2020 and whose total duration is more than 9 months, this potential extension shall not apply, with the term in the original request maintained.
Likewise, for cases in which the moratorium is associated with a mortgage-backed loan for a main residence, you shall be provided with a copy of the Code of Best Practices to which the bank has signed up, should you wish for them to be applied, if you meet the criteria.
Although the term has ended for applying for legal moratoriums, these were the moratoriums regulated under Royal Decree Law 8/2020 (complemented by Royal Decree Law 11/2020, Royal Decree Law 15/2020 and Royal Decree Law 19/2020).
1.5 What will the Sectoral Moratorium consist of?
(i) The modification (by redistributing repayments or extending the term) of the existing leasing or mortgage or personal loan or, (ii) in the form of a new personal loan. The interest rate must be the same as the postponed operation, maintaining the existing guarantees. No fees or charges may be passed on, nor must it be associated with any product or combination.
These extensions must be formalised before the Notary Public unilaterally by the bank (unless you expressly request its bilateral formalisation) and subject to the Real-Estate Lending Contract Law, if the operation subject to the moratorium is subject thereto. Notwithstanding the foregoing, Banca March shall formally provide you with simplified information (which, along with the corresponding acknowledgement of receipt, must be notarised), which will essentially indicate the legal and economic effects of the moratorium on your financial operation.
1.6 When do applications for the Sectoral Moratorium close?
30 March 2021.
1.7 Response period
Customers wanting to apply for the Sectoral Moratorium must file their application and their Banca March branch. Once a check has been performed that they meet the requirements, they will receive a response in a maximum of 30 days.
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