MADRID (AP) — Spain approved a two-year suspension of evictions Thursday for some needy homeowners unable to pay their mortgages, but activists said the government failed to address the larger issue of how those who give up their homes may still remain indebted, sometimes for the rest of their lives.
Evictions have suddenly became one of the most sensitive topics in Spain's financial drama, and government officials acted less than a week after a Spanish woman facing eviction killed herself by jumping from an apartment balcony. They are trying reverse or at least delay a trend that has seen more than 371,000 mortgage eviction orders issued since the financial crisis hit the country in 2008.
The government, which is still preparing a broader overhaul of the country's mortgage and property laws, said it hoped to shield those most in need by suspending mortgage payments for mortgage holders with annual income of €14,400 ($18,400) or less after taxes, or those with expired unemployment benefits.
"We must avoid families ending up in the street as a consequence of the crisis," Economy Minister Luis de Guindos told reporters. "What we're trying to do here is make sure nobody ends up without their house."
But the government tacked on conditions for those wanting an eviction suspension. To qualify, they must have more than three children, or have children under the age of three, or be elderly, or have disabled people in the household, or be single parents with two children, or be victims of domestic violence.
They can stay in their homes for two years without paying their mortgages, but it's unclear what will happen after that if they have still been unable to find work in a country where unemployment stands at 25 percent and is expected to rise significantly next year.
Part of the problem is that mortgage laws in Spain are particularly harsh. People unable to make payments who are evicted still remain liable to repay huge amounts because the value of their home or apartment has plunged during the crisis. Banks either sell the homes for much less than the original mortgage value or can't unload them, so the mortgage holders end up either owing the difference or paying back the whole loan. Their wages can be attached by the banks.
By comparison, most people in the United States who default give up their devalued homes to the banks and file for personal bankruptcy. That leaves their credit ruined but without continuing mortgage debt.
The Spanish government move "is a step forward, but we have to change the system and start all over," said Miguel Ordonez, a member of the Platform for Mortgage Victims who gathered Thursday with dozens of other activists in Barcelona to protest a planned eviction. Those who have their homes taken "still have their debt forever, and they can't start over in this economy. They can't find work, if they do, the bank takes a cut."
A judge at the last minute temporarily halted the eviction of unemployed construction worker Benedict Obi and his wife, Perpetua, from their small apartment but the Obis did not know whether the government measures approved hours later would apply to them or not.