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Spain Moves To Curb Evictions Of Most Vulnerable

Odigie, who lost her factory job three years ago, doubted she will ever be able to pay the ⿬126,000 ($160,700) she still owes on her mortgage.

"Economically, Spain is getting worse by the day, no one is doing anything about it," she said. "There are no jobs."

While Spain's mortgage default rate is relatively small at 3 percent, it stood at less than 1 percent in 2007 before the crisis hit. Now friends and family who used to help their hurting relatives when they couldn't make mortgage payments increasingly can't do so anymore. The Bank of Spain says there are now ⿬19.1 billion ($24.4 billion) worth of mortgages under threat of not being paid, up from ⿬4.1 billion ($5.2 billion) in 2007.

Public anger over evictions has been compounded because the government is negotiating billion-dollar bailouts for the same banks that are repossessing homes. In recent weeks Spain's General Council of the Judiciary, a police union and opposition parties have all demanded new legislation to end the widespread evictions.

Spanish banks have warned against enacting measures that could prompt mortgage holders to default on purpose because they feel protected. De Guindos doubted this would happen, and he did not give an estimate of how many people would benefit from the eviction suspensions.

He noted that while some people are losing their homes, Spain has 700,000 empty houses whose owners cannot find buyers, chiefly because banks are reluctant to give loans and people are afraid of buying into real estate after the crash.

Deputy Prime Minister Soraya Saenz de Santamaria said the government also passed legislation that will provide cheap rentals for those who have already lost their homes.

____

Associated Press writers Oleg Cetinic and Marta Ramoneda contributed from Barcelona.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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