Cajamar: mortgage floor abolished for all, but 15% default of loans…

Expect higher sneak commissions from Cajamar over the next few months after the rural bank admitted that defaults on loans have soared to 15,10%.

The admission comes as Cajamar admits this is impacting its ability to keep offering credit lines to customers. It’s total amount of loans on offer have sunk to 34 billion euros.

Although part of the increase is down to new accounting rules from the Bank of Spain (ie, they can’t sweep some under the carpet any longer). Cajamar reckons this is “about average” for the banking sector.

In other news, it has finally agreed to comply with a judicial order to remove mortgage floors from all its home loans. The mortgage floor meant that despite Euribor being at record lows, these lows weren’t being passed onto customers, as Cajamar had stuck a clause into the mortgage agreement saying that you couldn’t pay less then, say, 3% interest on your loan.

 

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