Failure to pay off the mortgage payment, or delay payment is an eventuality that can happen to anyone: a financial setback or temporary economic difficulties can in fact lead to the failure or delayed payment of one or more installments of the loan. When this happens, naturally the consequences and penalties of the contract holder take over, unfortunately sometimes quite serious.
What happens in case of late payment?
As mentioned at the beginning, the reasons that can lead to a delay in the payment of the loan date can be multiple. If the problem is economic, that is, when the installment due date does not have sufficient coverage in the account to be able to process the payment, you must notify your bank as soon as possible. If it is an online bank, you will need to contact the customer service department, otherwise you will need to go directly to your bank’s counter. The latter will then pay the default interest, but avoiding reporting to the etec, an IT archive containing data on the loans requested and provided to individuals and businesses.
To calculate these interests, it is sufficient to apply this standard formula : Default interest = days of delay x rate x default rate / 36500. Usually there is an increase of between 1% and 4% of interest for unpaid installments and percentage is applied according to the amortization plan, to the fact that the installments are constant, decreasing or increasing, monthly or half-yearly.
Currently, for example, the 2016 interest rate on overdue mortgage installments is around 8%. To this must be added the costs of the default of the borrower, that is, insolvency fees, reminder letter about 5 euros and debt recovery costs.
According to current legislation, if the economic difficulties are due to the loss of work or other nature, you can request the suspension of the loan, a renegotiation of the repayment plan or a subrogation.
How long is the alert to the etec?
Failure to pay the mortgage payment, in addition to the application of default interest, may lead, as anticipated other serious consequences.
You are considered delinquent if you fall into one of these three cases:
- failure to pay one or more installments of the loan;
- payment delay of more than 180 days from the original expiry of the installment;
- delayed payment of at least 7 installments between the 30th and the 180th day.
In the aforesaid cases, the bank may proceed with the termination of the contract and, subsequently, to the attachment of any property placed as collateral for the loan or the enforcement of any surety provided by the guarantor, as well as reporting to the end-to-end knowledge company, usually the etec. However, the customer has the right to be notified by the bank if any of these procedures is initiated.
Finally, if the delay is due to a technical problem, it is not the bank’s responsibility, but the borrower, who will be responsible for checking the payment of the installment every month and, in case of technical hitches, report them to the institute.
Non-payment of 18 installments of the loan: the changes in the bank decree
On May 4, Decree No. 59/2016 came into force, in which there are some measures that, as defined by the Minister of the Economy, Pier Carlos Paroay, “will allow to drastically reduce the times for the recovery of credits”. These include the rules that make real estate foreclosure easier after 18 unpaid installments.
Until now, in fact, the bank had to pass for the judge, in the event that the client turned out to be in default. The main novelty concerns the possibility for the lender bank, after 18 installments not paid by the customer, to proceed directly to the sale of the property, bypassing the procedure of forced execution, or the auction, which can last up to seven years.
This option is only possible if the client, assisted by a consultant, has voluntarily and expressly provided for the insertion of this clause in the loan agreement. Clearly, the credit institution can not oblige the citizen to sign it. This clause can only be established for future contracts and not even in the case of the renegotiation of contracts stipulated prior to the end of 60 days from the entry into force of the provisions implementing the decree in question.
Finally, it must be emphasized that the bank can only withhold the amount due, after the sale of the house, and is obliged to return any excess to the consumer. The payable to the bank will in any case be extinguished even if the value of the property, appropriately defined by an independent expert, is lower than the residual mortgage.
In the decree, rules have been inserted that provide for the informative and correctness obligations of the informant, even if the Bank of Italy, in the implementing provisions, has particular regard to cases of possible need or weakness of the consumer.