The European Union is about to deliver a new blow to Spain’s mortgage legislation. After granting the 2013 European Citizen Award to PAH, an activist group that demands that banks accept homes in return for canceling the debt of struggling borrowers, this week the European Parliament is set to approve a report with recommendations like “the renegotiation of debt or dation in payment for debtors or bankrupt families.”
Although this document is not binding, it does carry considerable political weight. The authors also ask member states to “prevent evicted families from having to return their mortgage credits.” According to Spanish legislation, foreclosing a home does not end a borrower’s financial obligations if the house is sold for less than the full mortgage amount.
There have been over 350,000 evictions in the last four years. Rampant unemployment means that growing numbers of people will be unable to meet their mortgage payments.