The mortgage protest groups gain ground

After six eviction attempts over the course of a year and a half, Lluís Martí, a resident of Bisbal del Penedès (Tarragona) was informed that the foreclosure on his home was being indefinitely suspended. A self-employed man who is out of work, and only collects 426 euros a month from state benefits, Martí sums up his own attitude thus: "They gave up. Like a Chinese proverb says, if you fight you can either win or lose, but if you don't fight you've already lost."

This was the first victory for a grassroots support group for mortgage holders in distress called Platform for the Mortgage Affected (PAH). Since then, PAH has helped stop nearly 100 evictions in Spain, mostly in Barcelona, Madrid and Murcia. And they are not the only ones ? there are now around 50 similar associations across the country.

Mortgage holders are liable for any debt even after handing their keys to the bank

Social problems can't be solved by modifying aspects of the mortgage system"

News of these small triumphs, amplified by media coverage of the broader 15-M protest movement, have spread like wildfire through social networks. But the movement is also demanding legislative reform to turn mortgages into non-recourse loans ? meaning that in the event of default, the lender can take the home but nothing else. Even if the market value of the property is below the full amount of the remaining debt, the creditor cannot come after the borrower's wages or assets to make up for the balance.

In Spain, there is currently no provision for this type of loan, which exists in parts of the United States. Here, mortgage holders continue to be liable for any outstanding debt even after handing their keys to the bank. The non-recourse mortgage is described here as dación en pago, or dation in payment.

What's more, these citizen associations want the reform to be retroactive, and for borrowers in distress to be allowed to remain in their homes on condition of paying a low rent. All imminent evictions should also be stopped, activists say.

The social and media impact of these groups has been such that it has forced political parties to state their position after initially tiptoeing around the issue.

"In a short space of time, PAH and others like it have managed to put the issue of evictions on the agenda of the press, the courts ? which recently handed down two rulings that were favorable to the concept of dation in payment ? and later on the political agenda," says Jaime Pastor, a professor of political science at the distance-learning university UNED.

Pastor, who was interviewed before the general elections of November 20, said he believed that the issue will remain on the public agenda for a long time, and that the new government "will have to propose some kind of measure in connection with this, such as a moratorium."

The Popular Party (PP), which won an absolute majority in the general elections, did not talk about reforming mortgage legislation during its campaigning, but it did mention changes to bankruptcy laws in order to introduce "mechanisms to free debtors after the execution of their seizable assets."

It is an ambiguous way of saying that if a borrower files for bankruptcy and loses his home, he could be partially or completely liberated from repaying the outstanding amount of the loan.

The outgoing Socialists, who will now be the main force in the opposition, had promised to make it mandatory for lenders to offer mortgage products in which the collateral is limited to the asset used to secure the loan, or in other words the home itself.

Meanwhile, the Catalan nationalists of CiU, which governs the northeastern region, talked about "favoring dation in payment through fiscal measures." The leftist-green coalition IU-ICV even wants it to be retroactive, while UPyD, a middle-of-the-road national party, expressed "active support for increasing the number of mortgages using dation in payment as a way to repay the loan."

In a country with a home ownership rate of 82 percent (it was 92 percent in 2002), and jobless figures upwards of 20 percent, the reality of evictions has become a national drama: there were over 30,000 of them between January and June of this year, according to the General Council of the Judiciary.

Support groups are glad to have put the spotlight on this problem, but they warn that they will remain alert now that the elections are over.

"It is easy enough to make promises, but all the measures put forward so far, such as the four attempts to legislate dation in payment in Congress, were vetoed by both major parties," notes Ada Colau, PAH's spokeswoman in Barcelona.

José García Montalvo, a professor of applied economics at Pompeu Fabra University, says that existing mortgage legislation already contemplates the possibility of non-recourse loans, but that this would actually make installments more expensive.

"It would be positive for the system, because there would be more guarantees, but from the individual buyers' point of view it would restrict credit," he says, adding that retroactivity in this case is just not legally possible because "the contracts have already been signed."

Instead, the scholar says the answer is to encourage voluntary dation through individual agreements between lenders and borrowers.

The Spanish Confederation of Savings Banks (CECA) also notes that changing the law to make mortgages non-recourse "would benefit a minority of borrowers, in exchange for hurting the majority ? 97 percent ? who make their payments religiously."

A similar notion was expressed by the Spanish Banking Association AEB: "A few of the changes under consideration could exclude a significant swath of the population from access to mortgage credit."

Instead, AEB calls for social measures "to alleviate the situation of families who have lost their homes."

"Social problems cannot be resolved by modifying technical aspects of the mortgage system," add the same sources, noting that before a foreclosure takes place, "we analyze all possibilities of renegotiating the terms with the client."

But political scientists and sociologists insist on the power of a popular movement that is demanding legislative reform. Joan Subirats, a professor of political science at Barcelona's Autónoma University, thinks that the movement connects with people on many fronts: "The lies, the greed, the joblessness, the rhetoric against banks' actions, the inequality..."

It was ultimately this popular support that forced the main parties to take a stand on the issue of mortgages and evictions. Subirats also underscores the role of the 15-M protest movement against the Spanish political class as a whole and its mismanagement of the crisis: "From day one, PAH connected with 15-M and understood that this was an opportunity to spread the message."

Vicente Pérez, a spokesman for PAH's Madrid branch, says that the 15-M movement helped drum up popular sympathy for a movement that seeks to stop evictions.

"Therefore, not only did parties incorporate the issue on their political platforms, but they were also very careful not to criticize it," says Pérez. "In their case it was pure electioneering."

Jordi Mir, a scholar at the Center for Social Movements at Pompeu Fabra University, says that PAH deserves a lot of credit. "Sometimes not even the activists themselves are aware of their ability to change things. If we now know what dation in payment is, it's thanks to them. If we know that this does not happen in other countries, and that France puts evictions on hold in the winter, and that our mortgage legislation, with people indebted for life, doesn't exist anywhere else in the world, it's thanks to the work carried out by groups such as V de Vivienda and the PAH groups."

All experts agree that the problem is only getting worse, and that the new government will be forced to act one way or another.

"They've got to do something, because the problem is persistent and growing," says Ada Colau, of the Barcelona PAH. "The magnitude [of the problem] is such that if they don't, the government will have governability problems and this thing will blow up in its face."