Spain to ease conditions for problem mortgages

Spain will ease conditions for people who can't pay their mortgages as floating interest rates rise and unemployment remains the highest in the European Union, the government said on Thursday.

Interior Minister Alfredo Perez Rubalcaba said the government will decree on Friday a new and higher limit on the amount banks can legally deduct from the wages of a mortgage holder in default.

The government is contemplating other new rules to protect homeowners four years after a property bubble burst leaving many Spaniards stuck in homes worth much less than what they owe the bank.

"Indignados" or "indignant" protests around Spain in recent months have called on the government to address the plight of borrowers who can be evicted by the banks but still owe the entire amount of their mortgage even though the bank now owns their home.

Source: Reuters.com