This isn't really a problem about people who don't want to pay, there have always been those types around since the beginning of time. It is a problem that people just can't pay even if they want to. They have no income, nor do the vast majority of their family members. There are 1.737.900 households as from September,(so it has probably increased) where every single member of the family is unemployed. People have no one to turn to for help. They have nowhere to go once evicted, families with children and elderly a being put on the street daily. If you are not aware, over the past year there has been an average of 500 evictions everyday. That's 500 familes on the street daily. This isn't a question of being poor or rich. The vast majority of these people aren't lazy, benefit seekers, but people with no hope of income in the short to mid term, some were wealthy before and have lost all their money, some were living on the breadline before and have lost their jobs. It doesn't really matter. The point is that there were thousands of people being evicted daily. This can't happen in a modern society, it is something that needs to be attended and thank God the government has finally done something. If we all have to pay for it in the long term, well so be it. You never know if it could happen to you.The mortgage law in Spain is just ridiculous and dates back to 1909 when only the rich bought houses and to be left with the mortgage to pay for once evicted is a just devastating. Times have moved on and society has too, the laws need to be changed to meet the needs of the country and not just the banks.  Some people may be oblivious to what is really going on, watching it on TV or reading about it in the paper, but when you see the desperation that these families are going through, through no fault of their own, it can't continue. It isn't that much different to a natural disaster, where people have lost there homes and are still left paying a mortgage because the insurance won't cover the damages. However in these cases everyone thinks of donating! Times like these call for drastic measures, even if it is to gain time until they finally decide what needs to be done to fix this problem for the future.

I feel for the people in Spain who are having the threat of losing their properties,at least they have one to lose .We put a deposit of £66,000 on a property in Murcia ,Parador Properties have taken our money and we have not had anything for it .I have been over to Spain numerous times to try and talk to some one but to no avail .We also have felt suicidal for the last four years and have struggled financially at an age when we should be looking to our retirement .I am working at my age 13 hour days again ,working away from home ,all the time trying to get Parador Properties to be compassionate and at least give me back Euros 40,000 i know under Spanish law they can only keep 1/4 of my money .Are their still any honset companies left in Spain

 This kind of attitude is what caused the problems in Spain in the first place.

It creates a huge moral hazard and will damage the property market for years to come.

If some people took on too much debt to buy a house, they should move out and the house should be sold to the highest bidder to cover the debt.

Who gives them the right to live in a house rent free which they have not paid for??

Why is moving to rented accomodation so terrible??

Absolutely disgusting how society has degenerated so badly - you made bad decisions, but its ok, live rent free in the house while all the other suckers pay their mortgage and rent.

why should anybody bother to pay rent or their mortgage now?

 I agree with monocapitan.

How is that going to improve the situation. This is the trouble with what I have been going on about in many of my posts. Too many people buying who just couldn't really afford to. The Banks, builders and buyers on a merry go round they thought would never end. Still they are building and millions of properties have never been sold in the first place. The house of cards will collapse.

This is a really complex situation, but what is clear to me is that they could not continue to evict over 500 families a day, it was inhuman. The fact that the Goverment has now stepped in, many people feel far too late, has at least taken the immidate problem of eviction away from these families, but it is only a supension !! These people will still have to pay everthing they owe to the bank and more to boot. Will be interesting to see what interest will be charged ? The Banks in many cases have insurance policies they can claim against, they will never lose out, of that I am sure. If things get tough for them again, good old Joe Public, will bail them out.

 evento

there is nothing complex about this situation at all...  if you cannot afford to buy an asset, it is liquidated and the proceeds go to the creditors.

500 people being evicted a day was the SOLUTION to the problem, these people could not afford to buy houses and should therefore be renting.

all it is doing is punishing those who were not foolish to take on more debt than they could afford.

why is it ok for some people to rent yet those wreckless enough to take on a debt at sometimes 10-15x their wage and then be allowed to stay in the house??! (rent free)

the end result will be complete paralysis in the house buying and renting market by stopping the banks exercising their property rights and stopping those who would buy the properties from stepping in and reviving the property market.

the only part of this which i do have sympathy with the buyers is that they should not be pursued for any of the debt once they give up the asset - but hey, it is not as if they were forced to buy the house and did not know the consequences...

MonCapitan.

Disagree with you complety, it is a very COMPLEX  situation.

A lot of these people were fully aware of what they were buying, had full time, PERMAMENT CONTRACTS, and were borrowing up to 33% Max of their income. What they were not aware of was the forthcoming property  crash, and both finding themselves out of work, with Spanish unemployment benefit only paying up to a max. of 2 yrs, if you had worked enough years to qualify.

On the other hand the Banks were fully aware of the future crash, but were more than happy to maintain the high inflated prices and sign up new Mortgages, telling the people that they would never lose, this was an investment that was going to keep rising in value, knowing full well that this was impossible.

I have no idea what your personal situation is, but this could happen to anyone, if their source of income suddenly dries up , loss of job or having to close down their business.

I think you should think before passing judgement on these poor people !!!

 evento

it is only complex to those of us whom have had a labotomy.  to everyone else - it is very simple.

but back to your theory  - these totally innocent and responsible people should stay in these houses rent free for the 2 years (say the avg rent  is circa €800pm) - this means they should get a benefit of around €20K because through no fault of their own they have bought a house which they can no longer afford.

lets take the logic of evento to the next step - are there any other bad decisions people can make where they should also be given €20K in benefits?

i know of quite a few people who would like to live in spain rent free - i will send them to Banco Santander to sign up.

RENT FREE !!!! - When did you have your Labotomy, you have not read or understood one word of my reply !!!! AND they have only had their Evictions supended SUB NORMAL, They stiill own the same amount of money to the Banks, they are getting nothing FREE.

I will add basic economics and maths to the list of things you know nothing about.  

All this proposal does is delay the inevitable.  People will still be evicted in 2 years time when they still cannot pay the mortgage.

Without this amendment, the people who cannot pay their mortgage would have to surrender the property to the bank so that it can go to pay off the debt.  Therefore, these people would have to move out and find accomodation and pay rent.

If they are not required to do this, they have saved 2 years worth of rent - this represents a large cash gift to these people - a reward shall we say for their feckless behaviour.

If they stay in the house, they are not required to pay any rent or mortgage for these 2 years.  So they live rent free.

What part of that do you not understand?

If these people cannot pay the mortgage now, then they will not be able to pay the mortgage in 2 years.  There is empirical evidence where this has been applied in Ireland and all it has done has destroyed the housing market.  Now they are talking about "debt forgiveness" - which is probably what will happen in Spain in 2 years time to help these "poor" people..  we couldn't possibly let people rent their homes, such a terrible thing.

 Mon capitan is right in his analysis, If you owe X now, because you can't pay your mortgage, in 2 years time, you will then owe the money you owe now and 2 more years of mortgage arrears.  The Banks will nor be able to evict people but as a mortgagee you will still owe the money, the Banks will just add this to your debts.  However, the Banks in most cases have already allowed many to run up years of arrears in mortgage payments, without evicting them. I know this to be true as I am a President of an urbanisation in Orihuela, 3 owners have finally been evicted, it has been revelled that none of them had been paying any mortgage payments for over 4 years. They've gone owing the Community over 2,000 euros each. Our community can do nothing about these debts to us, as the Banks have the first charge on these properties.

Spain is in such a mess, the government don't want to see hundreds of people thrown onto the streets because they have debts galore cannot pay and lost their jobs, due to the financial crisis across Europe. Which has been caused by Governments and Banks collaborating in encouraging people to believe they can have whatever they want, regardless of whether they can afford it or not. Until, everyone is more realistic in what they can really afford, nothing will change.

 Which is exactly the point I made at the start.  The debts roll up and in two, three or however many years, it will be a very few who will be able to pay - so they will have to move out or be evicted.   I do hope that the people who are saying this are not getting personal attacks via their private messages - as I did.

@Roly2

so you have had some dealings with banks then? So you are aware of the system called fractional reserve banking?  Are you aware that the loan given to the families to buy their homes didnt exist in the first place? But surely, being an intellegent person you knew that , right?   The same can be said for when governments borrow money from a foreign bank ( which they dont need to do, but can print the money theirselves)  and the tax payer has to repay the loan WITH INTEREST.    BUT you say it has to be done????/    has to be done for what????.  i really despair nowadays,   why wont you people wake up!!!     ITS THE SYSTEM THAT IS RIGGED TO ROB THE PEOPLE.   and the system isnt broke,   it was made that way.

Thank you, merkle 99, and your point is totally Relevant, but be careful or Mr Mono Captian, might tell you, you have had a Labotomy !!

 Yes Merkle, as I said - I did some time in litigation for banks.   Why the personal attack?   As I said - I don't do personal attacks, or indeed, snidey remarks.  Though since it is in the general forum and not my private messages - I did at least read it.

"All this proposal does is delay the inevitable.  People will still be evicted in 2 years time when they still cannot pay the mortgage.

Without this amendment, the people who cannot pay their mortgage would have to surrender the property to the bank so that it can go to pay off the debt.  Therefore, these people would have to move out and find accomodation and pay rent.

If they are not required to do this, they have saved 2 years worth of rent - this represents a large cash gift to these people - a reward shall we say for their feckless behaviour.

If they stay in the house, they are not required to pay any rent or mortgage for these 2 years.  So they live rent free.

What part of that do you not understand?"

This is incredible I'm so glad you're not in government! I don't think you have a clue about what is really going on.

"feckless behavour"?! 

The people that have been evicted and are being evicted in their large majority can't even afford to rent. If they could afford to rent, the bank wouldn't let them walk away from the house in the first place in order to go and rent! Only recently have the banks started with the Dacion en pago, where you can hand your house back and become debt free, but if you have the slightest income, enough to be able to rent, they won't let you take that route! Neither is it retroactive, those who are up for eviction, they can't choose this route now, it is only for new cases. So those being evicted now,in their majority can't afford to rent and are still left with the debt, it's no wonder they don't leave the house at the point when they know they won't be able to afford it. What would you do? Take your family under a bridge? 

500 people being evicted a day, is not the solution by any means, as it if far more than 500 people, its 500 families a day. If you think that is the SOLUTION you are missing the picture. You can go on all day about economics, but there is clearly a big problem that has to be dealt with. Due to evictions of this type squatter dwellings have increased around the country, where people are living rent free but as I am sure you understand they are not going to take their children to sleep under a bridge! Especially when these banks have been saved by public money in the first place. No one disagrees to the fact that if you have a debt you have to pay it back, that's just plain obvious, but regard it as feckless behaviour is just ridiculous. Of course some have been "feckless" and lived beyond their means but many have simply found themselves unemployed, with no benefits and no state help at all, only to have their house taken away, left with a debt and on the street, having payed taxes for years and years. So what do you do when the bank won't let you hand your house back? Which is what most people would like to do. How does that fit into simple economics? They would rather you were in your house for 18 months without paying, take your house away, cash in and chase you for the difference. Something is very wrong here. 

What ever happens, they will have to pay for it one way or the other, whether it is in 2 years or 3 years and cetainly with interest. So yes unless they find a brilliant job or get their businesses of the ground again in the next two years they may well have problems paying it in the future. But the problem right now is how to house these families. The government doesn't have a council house estate waiting for needy tenants to move in. The banks make it virtually impossible for people to hand in the keys and walk away from the asset and the mortgage responsabilities.So what on earth are they supposed to do. The mortage system is all wrong and the banks have taken advantage of it. With two years "breathing space" under special conditons, it is no more that a ploy to gain time and work out how to fix the problem, it is an extremely complex situation as it will undoubtedly affect banks, creditors, and the housing market, but all that was affected a long time ago, but just as Germany insisted on having its "breathing space" when the the Berlin wall came down and they unified east and west, Spain in general needs a bit of breathing space to reestablish itself and restructure. First and foremost is the nation. Undoubtedly it is something we will all have to pay one way or another, just as we have to pay to save a bank from collapse, but given the situation what alternatives are there? What needs to done is a new plan to avoid this from happening again in the future and try a solve the situationa at hand in the most humane manner possible, that is by really trying to identify those that are in need and helping them. If the norwegiand can see it it can't be too difficult for other to see. Norway has become the first European country to lead the way in sponsoring Spanish familes through the crisis and helping to contribute towards housing costs and food.

I take my hat off the the Norwegians.