Banks to halt evictions in “extreme” cases

Spain’s banks have told the government that they are willing to freeze evictions of destitute homeowners. The announcement came ahead of a meeting later Monday between the government and the main opposition Socialist Party to find a solution to a problem that is assuming an increasingly tragic face.

A 53-year-old Basque woman killed herself on Friday by jumping from the window of the sixth-floor home she was due to be evicted from. It was the second eviction-related suicide in recent weeks.

There have been some 350,000 cases of home repossession in the past four years in a country still locked in an economic crisis that has seen the jobless rate rise to over 25 percent for the first time on record. The problem is expected to worsen, with Brussels predicting that the ranks of the unemployed will swell to over six million in 2013.

In a letter to the secretary of state for the economy, Fernando Jiménez Latorre, the Spanish Banking Association (AEB) said its members were willing to halt evictions over the next two years “in cases of extreme need for humanitarian reasons.”

The Spanish Confederation of Savings Banks (CECA) also said it would suspend evictions of “particularly vulnerable” families from their homes.

The AEB did not define what it understood by “extreme need.” It also rejected Socialist demands for the stay on evictions to be made retroactive.

“This commitment has been the object of intense and profound debate among member banks, with a view to helping to ease the situation of destitution many people face as a result of the economic crisis,” the AEB said in its letter, which was sent on November 8.

The association said it was willing to sit down with the government and the main opposition party as well as other political groups “to offer its opinion on the organization of the mortgage market with a view to it meeting the primary need for housing.”

Banks such as Kutxabank and Caja Laboral have already announced their decision to freeze evictions, while Caja España-Duero has placed a stay on seizing the homes of families in dire financial straits.

The banking sector reluctantly accepted a Code of Good Practices on evictions in March of this year.

The code in theory provides protection for homeowners in some cases, such as those where all family members are out of work and have to set aside over 60 percent of their resources to pay their mortgage.

Under Spanish law, even in the case of foreclosures, mortgage holders are still liable for outstanding bank payments on the property.

The current mortgage law dates back to the beginning of last century. Judges have also called for a solution to the problem, while a police labor union has said it would support officers who refused to assist in evictions.

Deputy Prime Minister Soraya Sáenz de Santamaría said Monday that the ruling Popular Party and the Socialists would try to come to an agreement on how to “stop the large number of evictions of people and families who find themselves in a situation of severe social vulnerability.”

Sáenz de Santamaría and Elena Valenciano, the deputy secretary general of the Socialist Party, on November 7 agreed to look for a solution to the eviction problem “as soon as possible.”

One of the ideas that have been touted is the introduction of a legal two-year moratorium on people without resources being thrown out of their homes.

María Dolores de Cospedal, the secretary general of the Popular Party, on Monday said there was a whole “gamut of solutions and proposals that need to be put on the table. We are going to resolve the problem. Many families are losing their homes and the government has studied this socially sensitive matter beyond the code of good practices.”

Speaking in Brussels, Economy Minister Luis de Guindos said “no family that acts in good faith should be without a roof over their heads.”

The Platform for the Mortgage Affected (PAH) held protests in Madrid on Monday against evictions. PAH wants any moratorium to be applied to all those who are unable to service the mortgage on the family home for reasons that are outside their control.