40,000 Catalan families lose their homes in last 3 years
Economic crisis is hitting some families unmercifully. 40,000 families that could not pay back their mortgage have lost their homes, according to a study made by the General Workers’ Union (UGT) and a consumers association presented today. A judicial procedure that permits banks and savings banks to survey homes and put them up for auction for 50% of their value is putting thousands of families in the risk of social exclusion.
Barcelona (ACN).- A joint report by the General Workers’ Union (UGT) and the Association of Catalonia and the Association of Bank and Savings Bank Users shows that in the last 3 years, 40,000 families in Catalonia alone have not been able to pay back their mortgage and have been evicted from their homes. This is the result of a judicial procedure that permits banks and savings banks to survey homes and put them up for auction for 50% of their value, making the person who took the mortgage pay the rest of it if necessary. This is an action that, according to the report, “has multiplied in the past few years” and is putting many families into “social exclusion”. Now these associations are developing a Popular Legislative Initiative at Spanish level to change this law.
The report explains that one of the problems is that in Spain mortgage loans are personal with a mortgage guarantee, meaning that they are tied to people and not property. So in cases of non-payment, the mortgage is connected with the person instead of the property, leaving individuals in a state of “vulnerability, without protection and at a high risk of social exclusion”, state the authors of the study.
According to the report, in 2009 there were a total of 93,319 evictions due to unpaid mortgages throughout Spain, some 20% of them in Catalonia. With over 18,000 cases in Catalonia alone, it is the autonomous community with the most housing impoundments. In fact, in the last 3 years, Catalonia alone has seen 40,000 families lose their homes for not paying mortgages, showing a 485% increase. As far as provinces, during the last 3 years, Barcelona has seen the most evictions with 23,606 in total. Girona recorded the highest growth of 542.4% with 4,990 evictions.
Though concrete numbers do not exist, the report suggests that in Catalonia, compared with other parts of the State such as the Balearic Islands or Valencia, the majority of evictions correspond to primary residencies, “a fact that heightens the gravity of the situation”.
The UGT, the Consumers’ Association of Catalonia, and the Association of Bank and Savings Bank Users all believe that the situation will soon get worse. They justify this by the number of economic procedures that must be carried out on a state level, a total of 1,200,000 excluding those that are strictly mortgage related. Because of this, they believe that as a result of the 30% of unpaid mortgages in Spain, some 600,000 families throughout the State may “soon” lose their homes to banks and savings banks.
Now the 3 associations want to “pass an action” to develop a Popular Legislative Initiative at Spanish level to reform the current mortgage law. The reform would also include the modification of the Law of Family Over-indebtedness and the Law of the Loan Market, introducing clear rules for credit activity to avoid abuse from banks and savings banks. Finally, their demands will imitate the models used in countries like the United Kingdom, where insolvent individuals who are in debt for reasonable matters may liquidate their debts and start from zero, as companies do.