Smart SpendingSmart Spending

Foreclosures in Spain spark suicides, fury

Public outrage erupts in a country where even when you lose your home to foreclosure, you still must pay the mortgage.

By MSN Money Partner Nov 16, 2012 6:14PM

This post comes from Marilyn Lewis of MSN Money.

 

Image: Europe © Photodisc, SuperStockAmid 25% unemployment, hundreds of thousands of Spanish families are struggling to pay their mortgages. Hundreds of thousands more have lost their homes to foreclosure.

 

The Spanish public is seething in response to foreclosures, especially after pending evictions were blamed for two suicides. One was this week, when a woman jumped four floors to her death moments before she was to have been evicted.

 

One focus of public reaction is the severity of Spain's mortgage laws. Al-Jazeera reports, "In Spain, homeowners unable to make mortgage payments may be evicted but still remain liable to repay whatever value is left on the mortgage after the repossession."

 

Two-year moratorium

Spain's bankers are trying to ward off efforts to change the laws, saying the changes would add to mortgage costs.

 

The pressure, however, moved Spain's largest banking association, AEB, to institute a two-year moratorium this week on evictions of the most-vulnerable households. After talks with government representatives, AEB issued a statement saying, in part, that it wants "to help alleviate the situation of helplessness that many people are suffering owing to the economic crisis."

 

In the U.S. housing crisis, foreclosure moratoriums were used briefly. They were broader in scope but employed for shorter periods -- for example, in the months while bankers were negotiating their 2011 settlement with state attorneys general, or over the winter holidays in 2009, 2010 and 2011.

 

In 2010, however, Treasury Secretary Tim Geithner rejected calls for a national moratorium, saying it would hurt communities by stalling a housing recovery, according to The Huffington Post.

 

In Spain, the bankers' halt to evictions will not be far-reaching, The Wall Street Journal reports. Only households with people who have lost unemployment benefits or are disabled, seriously ill or very elderly will be protected. Unemployment on its own, apparently, isn't a qualifier.

 

The Journal writes:

"Those qualifying for relief must have annual income of less than €19,200, or $24,450. There are other specifications: Single parents with two children would qualify, for instance; a couple with two children won't."

Public fury over suicides

This week public reaction intensified after the second Spanish homeowner in two weeks committed suicide on the eve of eviction. On Monday, "moments before she was due to be evicted . . .  Amaia Egaña, 53, leapt from her fourth-floor flat in the northern city of Bilbao," The Guardian reports.

 

Al-Jazeera reports:

"On Monday, the evictions of at least two couples in Madrid and one in eastern Valencia were called off. As in other cases, crowds of protesters had gathered outside the apartment buildings to try to prevent police and court officials from entering. The protest movement has gathered momentum nationally in recent years as the dramatic impact of the repossessions has increasingly angered Spaniards."

A police officers' union has offered legal support to members who "conscientiously object" to helping with evictions. "We're not robots, we're human beings, and this is like the soldier in a firing squad who refuses to shoot, even knowing he will take the place of the one to be shot,' said Jose Manuel Sanchez, the union's secretary general," according to The Guardian

 

Promise: No homelessness

Spain is in the midst of a second recession following its housing bubble crash of 2008. Some 350,000 people have lost homes in four years, says The Associated Press.

 

The Guardian estimates the number at 400,000. It says that, this week, in the city of Bilbao, "stickers saying 'murderers' were fixed to cash machines, while the governing People's Party and opposition Socialists pledged to hold an emergency meeting on Monday to agree on reforming mortgage laws."

 

Spain's government is responding. According to the AP: 

"Speaking in Brussels on Monday, Spanish Economy Minister Luis de Guindos said his government aims 'to introduce measures that ensure that no family acting in good faith will end up homeless because of the crisis. That is the commitment.'

 

"The minister pointed out that the eviction crisis comes at a time when Spain has 1 million empty houses whose owners cannot find buyers, chiefly because banks are reluctant to give loans."

Critics say the eviction moratorium and government response are insufficient. Notes The Guardian, "Spain's banks have come under fire from protesters and opposition politicians for continuing to carry out evictions even after some received part of a European bailout negotiated by Madrid which could amount to €100bn (£80bn)."

 

More on MSN Money:

29Comments
Nov 16, 2012 8:59PM
avatar
Funny how not a single banker, broker, or government official has been prosecuted following the greatest financial collapse in the history of the United States...Millions have lost their homes, jobs, savings, businesses and not one corrupt person has faced a jury...Why in hell is Obama's justice department running guns to Mexico, but they can't prosecute those who precipitated the collapse of the world economy...
Nov 18, 2012 6:08PM
avatar
Working in the business of property preservation on foreclosed homes it is simply astonshing on how many of these homeowners have really tried to keep their homes and work with the banks.To no avail they still had to move out.Some actually are back on their feet and have fought back working really hard.Countless home owners were refused by the bank to work it out.Now the home sits in foreclosure and no one taking care of it except the lawn and maybe some minor repairs.Granted their are some that did not even care but there are many that did.. The banks are ruthless in this matter.
Nov 18, 2012 6:13PM
avatar
This is Just a Glimpse into Our Own Downward Spiraling Economy,  As Jobs Keep Going by the Wayside , It's Pretty bad When Mexico is Fairing Better than The US at Least from what MSN has been Stating about Mexican Companies in line to Buy Twinkie & Other Hostess Product Names.   I Barely Made it through The First 4 Years of Obamanomic's , Now That His Policy's will Really be Kicking in, I have No Hope in Surviving, as I Already went thru My Entire Savings Trying to Stave off Forclosure Due to The Great Recession That Hasn't Really Ended as of Yet. Obama Said it was Over Back in 2009 (He must have been on a Choomer Binge), But  That is Just Not So. People are Still Struggling & or Already Given up  & are Resided to Living in a government Box & Dependent on The Government Cheese
Nov 18, 2012 7:46PM
avatar
The big banks do not care because all FHA loans are backed by the government, so they are getting their money regardless. Actually, they make more money through foreclosure. This isn't Obama's fault either. You may disagree  with him politically but  the housing crises was years in the making.
Nov 17, 2012 7:31PM
avatar

Telling; the source of MSN information;

, "In Spain, homeowners unable to make mortgage payments may be evicted but still remain liable to repay whatever value is left on the mortgage after the repossession."

Nov 18, 2012 9:22PM
avatar
There have been some who have lost their job's in the US over the mortgage deals, but not enough and not the right ones.
Nov 19, 2012 1:32AM
avatar
Obama with his waste of monies for  his wind towers....his solar panels...his $billions of our tax monies for his cronies...his Obamacarenightmare traps....his war on our fuel....coal...his expansion of food stamps and welfare for more immigrants..his very expensive lifestyle at a cost of $1.4 Billion....his NO job increase because of his high regulations and taxes on everything...etc...will render the US incapable to recover for years to come...Spain will look good...if Obama keeps it up...People will be murdered for peanuts....never mind jumping out of windows...Welcome to the New Obama Agenda...Hope liberals have great fun picking up their belongings on the sidewalks...enjoy...That's how Spain wasted all the tax payers money....with green crap...
Nov 18, 2012 9:46PM
avatar
Oh well.......coming to USA after 4 more Years of Obama......it will take this to wake up idiot Americans who vote for a president like its American Idol, Dancing with the stars, the Bachelor or Bachelorette....they dont let facts get in the way...they dont vote on unemployemnet, the economy, GDP, Debit crisis, Government spending, etc.......to the Liberal idiots its all about My abortion rights, my free birth control, my free anything....healthcare, welfare, etc.....its coming to a breaking point and will be ugly......it will take a spain/greece/italy type situation for these morons to see it........never mind unemployment is higher after 4 years of Obama.......4 more (8) total will be the same or worse.....bottom line....4 years from now the have nots will still be crying "where is mine"....and the have's will continue on........the Obama supports life will still suck to be them....hoping they get some of the rich peoples money......but they will just be paying more for the same stuff because the rich people raised prices on the stuff the poor people buy because Obama stuck it to rich white people......yep....you dumb liberal morons keep believing that line......
Nov 18, 2012 8:46PM
avatar
To someone, the gun running program was not Obama's. Lets move on to something that is not happening now. The economy is still in trouble, and we need to fix it.
Nov 18, 2012 7:04PM
avatar
In America if you loose your house to foreclosure you you still have to pay the remaining difference ( if any ) once the house is sold. If it's sold at less than what you paid it's far worse than just continuing to pay a mortgage like the Spanish have to do, because ( I'm assuming ) the spanish banks are just trying to get someone else to assume the mortgage. But our banks sell the mortgages.


Nov 18, 2012 6:20PM
avatar

That is f-ed up. That's like me moving to a different apartment and being expected to pay for both my present and apartment and a new apartment too.

 

 Thank goodness my mom has her morgage paid up with it being close to retirement for her here in America.

 

Is there any kind of International mediary that can help the Spanish people?

Nov 18, 2012 11:53PM
avatar
The mortgage crisis was caused by the government to keep baby boomers from retiring and no longer paying into medicare and socialist security, don't get me wrong they let the greedy bankers off the chain and they went wild but fannie and freddie were up to there necks in it also.
Nov 19, 2012 9:35AM
avatar
DAMN!!! 25% and still have to pay mortgage? We are ready to cut off heads for 8%. 
Nov 18, 2012 7:43PM
avatar
Let the spanish handle there own , they think they are " all that "anyway .... we have our own issues
Nov 19, 2012 1:10PM
avatar
Wow, you have to pay back the mortgage even when you lose the property? Is this what we can expect from Socialism?
Nov 18, 2012 1:39PM
avatar
Come to the US instead; I know of a few people who haven't paid their mortgages in years and still live in the property and could care less.  They'll just go on to rent somewhere with no other issues. This is unreal.
Nov 18, 2012 3:09PM
avatar
Spanish people didn't  a hard life. They are anxious.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More