Tough mortgage laws in Spain have allowed banks to evict more than 400,000 people since the 2008 economic crisis hit and the housing market subsequently collapsed. Our Observer explains how a grassroots movement in Granada is successfully forcing banks to drop plans to evict people by holding sit-in protests on their premises.
Imagine losing your job, failing to make your mortgage payments and then finding out the house you bought ten years ago is worth €100,000, instead of the €450,000 you paid for it. The bank repossesses your home, but by law you still have to pay back the full mortgage, complete with interest and late fees, even after you have been evicted. Debt-laden, unemployed and evicted: this is the plight of hundreds of thousands of Spaniards who have been hit hard by the toxic combination of an economic crisis, austerity measures and harsh housing laws.
In a bid to reduce Spain’s 10.6-percent budget deficit
, Prime Minister Mariano Rajoy’s government has increased taxes and made big cuts in public spending, including health, education, unemployment benefits and pensions. Civil service jobs and pay have been slashed and unemployment in Spain stands at 26 percent
As banks continue to evict, there are 3.4 million empty homes
in Spain – nearly 14 percent of the total housing stock – most of which is owned by banks. A series of suicides by evicted citizens and those on the verge of eviction thrust the crisis into the spotlight and put banks and the government under fire from the media and the EU.
In March this year, the EU Court of Justice ruled
that Spanish law gave “incomplete and insufficient” protection for mortgage holders and ruled in favour of giving Spanish courts new powers to delay evictions. Before the ruling, Spanish law meant citizens faced eviction if they fell behind on the mortgage repayments by just a month.
The ruling was a victory for campaigners, but they feel the battle is far from won: the ruling merely delays evictions. Spaniards forced out of their homes are still finding themselves legally obliged to pay back mortgages
even after they have handed over the keys.