Given the growing social problem of forced evictions, the Socialist Party on Thursday presented a bill in Congress that would protect families from being kicked out on the streets if they cannot make their mortgage payments.
The proposed law comes up with new ways to enable families to meet their debt obligations while at the same time continuing to live in their own homes. One of the most important aspects would allow mortgage holders to pay what is being dubbed “social rent” — a fee that would not surpass two percent of their annual mortgage repayments and no more than one-third of the family’s total income.
Leire Iglesias, the party’s spokeswoman for housing, and Inmaculada Rodríguez Piñero, one of the Socialist officials in charge of economic affairs, explained during a news conference that the proposed law, if passed, would force some banks to reach a notarized settlement with their clients.
The United Left (IU) party said it is also planning on introducing a battery of incentives to help indebted Spaniards from losing their homes. On Thursday IU lawmakers questioned if the ruling Popular Party (PP) would take into consideration an internal report by the General Council of the Judiciary (CGPJ) concerning the alarming number of evictions in Spain.
In the report, which has been seen by EL PAÍS, seven of the judges criticized the way banks were carrying out the evictions, saying, among other things, that government money handed to banks should also be destined to people who are losing their homes. The CGPJ, however, decided not to debate the report because it had not been formally approved by all of the judges who drafted it.
The Socialists’ bill proposes that banks that have received government money “be obligated to accept a payment on the account or the relinquishment of the apartment in exchange for the cancelation of the mortgage with the bank or savings bank.” This would bind all financial entities that have received money from the Orderly Bank Restructuring Fund (FROB). The Socialists have also included a clause stating that families with incomes lower than 18,600 euros a year can opt to pay an agreed minimum amount that will go toward paying off the mortgage.
According to the Socialists, there are some 400,000 people across Spain who are facing eviction procedures.
For his part, Gaspar Llamazares, the IU coalition’s spokesman for legal and judiciary affairs, on Thursday called for changes to the nation’s mortgaging laws that would help homeowners refinance their properties at more affordable rates and establish payment grace periods for those most in need.