Spanish Government Prods Banks to Modify Mortgages
Saturday, March 10, 2012 @ 10:49 AM
Spanish banks that voluntarily sign on to a newly approved code of good practices will be required to restructure the mortgage debts of certain distressed borrowers and is some extreme cases repossess properties and write off the debt.
Prime Minister Mariano Rajoy’s conservative administration on Friday approved a decree law containing the new guidelines, the deputy premier, Soraya Saenz de Santamaria, told reporters at a press conference.
She said the new rules seek to “mitigate the dramatic plight of more than 1.5 million families that have all their members out of work” and are on the road to foreclosure and eviction due to a lack of income to cover their mortgage payments.
The new measures will serve as a buffer for families “at risk of social exclusion,” the deputy prime minister said.
She estimated that a total of 300,000 foreclosures have occurred in Spain since the onset of the financial crisis.
For families to qualify for relief, the affected home must be their only residence, all the members must be unemployed and mortgage payments must represent at least 60 percent of household income.
Read more at laht.com