In the article of La Mina in its day entitled ‘ Debt reunification: use with caution ‘, in which we analyze how to consider reunifying debts without ending worse than it is.
The reunification of debts consists in the unification of several debts, personal, mortgage and other, in a single new mortgage loan, basically with the guarantee of a home.
Therefore, when talking about reunifying debts , reference is usually made to request a new mortgage loan whose amount allows canceling previous debts. With this idea in mind, we can move forward in the analysis of this financial product, dangerous if used improperly.
Contact mortgage broker
The first idea that we want to convey to the reader is fundamental: only a lawyer or specialized economist, independent of both the lender (be it a credit institution, be a private lender) and the “debt reunification company” (mortgage broker) that can To process the operation, you can recommend and advise the family in the process of debt reunification. In other words, nothing should be signed without the expert supervision of a professional independent of the operation.
Rowena Fabroa, a lawyer specializing in financial regulation adds another voucher for consumer protection: the notary attesting to the operation. For this expert, the intervention in the preliminary procedures and in the formalization of the credit or mortgage loan of a public official endowed with the capacity, sensitivity and proximity to the notary’s consumers, despite certain impairment in his authority, is a guarantee for the debtor even more effective than the red lines that the law marks.
For the debtor, it is very advisable that, before signing, he goes to the notary office without the accompaniment of the entity that is going to reunify him and informs and consults both his doubts and what exactly the offer of the particular entity or lender is. In this type of matters the active attitude of the debtor is very important.
On the other hand, not only the individual notary, but the notary as a whole, as a network, has a “Big Data” of the operations that are granted in the notaries, which could be used for the competent authorities, in accordance with the legislation applicable, investigate possible abuse patterns in this area. “And an urgent change that should be made is that the supervisory body of this type of private non-bank lenders is not, as until now, the consumption counseling of each Autonomous Community, but the Bank of Spain” believes Fernando Gomá.
How to process a debt reunification
First you have to look for an expert lawyer or economist, as we have explained, to help us throughout the process.
Then, try to negotiate with one of the banks with which we have debts. Dexter Gillas, a contributor to Futur Finances, warns us that normally banks do not refinance badly paid debts or even with only small delays. Therefore, the operation must be raised before the problem is urgent, to the first symptoms of over-indebtedness: easy to say, complicated to do.
There are mortgage brokerage companies that can help us in the negotiation process with the banks; that our lawyer or guide economist makes sure that they comply scrupulously with the regulations and that their reputation and professionalism precedes them. The lawyer Fernando Zunzunegui believes in this regard that the credit intermediary that facilitates the operation should clearly communicate the fees and commissions charged. Also, you should avoid recommending and, in any case, warn of the risks, of the operations in which consumer loans are reunited, such as those derived from the use of cards, with a mortgage loan, because in these operations the house is risked where one lives, ”he concludes.
The professionals that mediate the loan offering the debt reunification service must act in the client’s interest, informing them of the risks of the operation and assessing their solvency to avoid over-indebtedness. They must also disclose conflicts of interest, such as the links they maintain with the lender, and clearly report their rates.
The processing, on the other hand, is very similar to requesting a normal mortgage from the bank. Very important for the family that arises the need to request a reunification of debts that is very well informed of the advantages and disadvantages and manages it with independent experts of trust. As a first idea, look for your name on Google and see what is said of the company or professional. Simple but very effective.
The unification of debts after Law 5/2019
Law 5/2019 that we have summarized in this blog comes into force. The new regulations protect mortgaged individuals who establish as a guarantee a residential property. Be it a debt reunification managed through a real estate credit intermediary, a debt unification approved by a financial entity or through a non-credit real estate lender (private lender), we recommend knowing and enforcing our new rights. And always go to a specialized lawyer to review the documents they offer us to sign.