Data about homes being repossessed by banks and consequent evictions from first residences in Spain are somehow sloppy. Their source is the Spanish Mortgage Association AHE, an organisation made up of banks, savings banks, cooperatives and credit financial institutions which have a major presence on the mortgage market. AHE associates hold approximately 80% of the mortgage loan market, yet their figures range from 1,680 to 6,300.
The 400,000 number reported by the media, AHE explains, is the total volume of proceedings, of which 42 percent or 168,534 have ended with the occupants forced to leave. Just a fraction of them affected families living in their only residence.
But lack of an appropriate mediation mechanism and social services support in a few situations that would have required more attention met a lamentable conclusion: suicide. The government’s answer to public outrage has been to halt from November 24 all evictions during two years without any costs for the borrowers if they can apply to the moratorium programme.
Subjects of the new law will be single parents with two children, families with at least one child aged three years or less, families with members in situation of illness, an above 33 percent disability or families in which the mortgage debtor is unemployed and is not receiving any benefits, among other extreme cases.
The new legal framework is playing well in the mortgage-backed bond market, said analysts at Link in Madrid. “The new royal decree has had no appreciable impact in the covered bond market, so far,” experts indicated. “During the last week, the price of these securities has seen very little volatility, even considering the spike suffered by the curve of yields on Spanish sovereign bonds.”
Participants in the sector commented that the rate of this type of asset may be more sensitive to an eventual petition of a bailout, and the articulation of such rescue.