Change to mortgage foreclosure law rebutted

Spain’s Parliament rejected a law that would have eased the effect of mortgage foreclosures for home-owners unable to meet payments.

The Galician National Block had asked legislators to amend the law to allow mortgage holders to walk away from their debt by handing over the keys to their properties. It also would have permitted homeowners to delay mortgage payments beyond stipulated deadlines and to consent to partial debt write-offs. Lawmakers rejected the proposals, Parliament said on its website late last night.

As in the UK, under Spanish law, if a foreclosed property is sold for less than the outstanding mortgage on the asset, the bank can claim the difference from the borrower. Lenders can make a claim against all of a borrower’s present and future assets and earnings.

“We are talking about a social problem of the highest order,” Francisco Xesus Jorquera, a BNG lawmaker, said by telephone from Madrid yesterday before the vote. “It’s a debate that must take place as there is social outcry for the mortgage law to be reformed.”

Source: Kyero.com