Currently, the granting of a credit policy or any type of loan by a banking entity, whether a mortgage or personal, is subject to someone with solvency for the bank that guarantees compliance with the payment obligations of the loan contract or credit policy with the provision of a guarantee.
As you will know, when applying for a mortgage loan or a credit policy, credit institutions or banks usually also require a personal guarantee (usually from relatives of the main debtor applicant) to have a better guarantee that they will charge the debt or loans, since it may be directed against the debtor’s assets, the mortgaged property, and the guarantor’s assets.
Issue of guarantors against loans or credits by a banking entity
In addition, the bank usually requires that the guarantee be “solitary” and that the guarantor waive the benefits of “exclusion, division and order” (to which he is entitled under the provisions of the Civil Code) in order to claim him immediately without first having the principal debtor declared insolvent or having to auction the property.
But we must be careful, because the bond or guarantee is the result of a contract, and therefore of the will freely be issued by the parties, and we must be aware of its consequences when the principal debtor does not pay and the bank makes known to the guarantor or guarantors who respond with all their present and future assets of a foreign debt.
In the bond there are several relationships:
- That of the debtor with the creditor (which is usually a bank).
- The bank with the guarantor.
- That of the guarantor with the debtor.
The problem of claiming debt to guarantors and clauses by which their rights are waived.
The guarantee is a type of bond, that is, a guarantee in the payment, which is regulated in the Civil Code, by which one is obliged to pay or comply with a third party, in the case of not doing so, with all its goods and rights, present and future. Thus, in the case of mortgage loans, if the person receiving the loan fails to pay it back, the guarantor will be obliged to pay it instead.
In the banking field, it is common for the bank to require as a condition to grant a loan that another person guarantees or guarantees its repayment: if it considers that the guarantees presented by the borrower are not sufficient to assure him that he will be able to repay the loan, he wants there to be Another solvent person who agrees to do so in case the borrower fails.
However, we must know that the figure of the guarantor in civil law enjoys, in principle, a series of rights, such as the rights of excuse and order, by virtue of which the guarantor can demand from the creditor (in this case the bank) the realization, in the first place, of the assets of the principal debtor of the loan and, in addition, to designate which assets of that one should be the ones to be executed in case of default.
The legal regime of the bond
Established by the Civil Code is that the creditor may only demand payment from the guarantor once he has claimed the principal debtor and no longer finds assets to be seized; that is, it can only claim the guarantor when the principal debtor becomes insolvent; This is what is called an “excuse benefit.” However, the civil regulations allow the guarantor to renounce said benefit or to be jointly and severally liable to the principal debtor, that is, to assume the debt as their own, so that the creditor can claim payment either from the borrower or the borrower. guarantor.
The division benefit, in the case of several guarantors, if the bank claims the debt from a guarantor, the latter may ask the guarantor for the part that corresponds to it, unless it has been agreed that all the guarantors will respond jointly (which also usually look at the bank clauses).
On the other hand, it is also very common for mortgage debtors, throughout the life of their loan agreement, to agree or renegotiate with the titleholders of the loan modifications without the guarantor’s consent: such as the extension of the borrowed capital, of the return period, etc.
Such modification or novation of the loan contract without the consent of the guarantor leads to the application of the extinction benefit established in the Civil Code, which provides that “the extension granted to the debtor by the creditor without the guarantor’s consent extinguishes the bond”, and, therefore, the responsibility of the guarantor ignored in the agreed novation will not be enforceable when the modification of the conditions initially agreed to affect the amount of the loan, its interest, or the term of the contract.
In practice, credit institutions demand the solidarity of the bond, so the guarantor is excluded from these rights of excuse, order, division, and therefore, may be required in payment at the same time as the principal debtor, and not in a subsidiary manner as provided by the Civil Code.
An example of such a clause would be this:
(…) “The guarantors or guarantors of this operation, by themselves and by their heirs, where appropriate, are responsible for the fulfillment of all the obligations contracted by the borrower under this contract, and the consequences of those and the latter. , relieve entity X of any obligation of notification for non-payment of the secured debtor and expressly waive the benefits of order, excuse, division and termination determined by article 1.851 of the Civil Code that could legally assist them for their condition of sureties. The guarantee regulated here will be subject to the same stipulations of the main operation, insofar as they are applicable ”.
Attention. If the bond or guarantee granted is joint and several, in accordance with the regulations of the Civil Code, the creditor (bank entity, in this case) can address either the lender or the guarantors.
Finally, we must bear in mind that the debtor responds to the fulfillment of the obligations “with all his assets, present and future”, that is, after the death of the guarantor, it will be the corresponding heirs of the deceased who assume said obligations.
Better mortgage or bond?
In the case of a person who is mortgaged, the debt is guaranteed only with the mortgaged property, but with neither more nor less assets. In the second case (bond or guarantee), the guarantor guarantees the debt with all his present and future assets, that is, with his home and all the others he has or may have, which is better for the bank since it can garnish the payroll or pension without having to go to the long judicial process that the foreclosure lawsuits suppose.
In recent times we have been acquainted with numerous judicial resolutions, both at local, state and even European levels, including ex officio, which refer to the existence of abusive clauses of numerous contracts concluded with banking entities.
Recently the courts are ruling that a guarantee of this type is null and void, based on the fact that the buyer or lender and the guarantor are private, and therefore the regulations of consumers (Law of General Conditions of Contract and Consumer and User Protection Law) which considers it abusive to impose disproportionate guarantees on the consumer.
(the bank already has the guarantee of the debtor’s estate and of the estate itself), such as, for example, the judgment of 02-10-2014 of the Court of Appeal Mercantile number 1 of San Sebastián declaring the annulment of the solidarity guarantee that two parents granted in favor of their children in a mortgage-guaranteed loan, on a home that they acquired, considering the waiver of all rights that corresponded to them As guarantors