November 11, 2012

Spain considering eviction moratorium

El Pais (via Google translate) reports Government will give a two-year moratorium to end evictions.
Social pressure, political and, above all, the shock of facts so overwhelming as two suicides in recent weeks, the second on Friday, has led the government and the PSOE to move faster. Both contacts for accelerated progress towards an agreement to halt evictions more extreme than in any case, will not materialize until next week. That agreement, however, will not be retroactive and would apply to mortgages signed, but not those that are in foreclosure. It would not serve to cases like EgaƱa Amaya, the woman who committed suicide in Barakaldo.

The Prime Minister, Mariano Rajoy, solemnized the idea during an election rally in Lleida: "These days we see terrible things, inhuman situations, a person committed suicide when she would be evicted. It is a difficult subject, you have to take it with all seriousness and humanity. The government is talking to many people, we talked this morning with the PSOE. I hope we can talk on Monday of the temporary cessation of evictions affecting the most vulnerable families. And the threshold of exclusion, to better implement the code of good practice, so you can renegotiate the debt and remain in housing. It is a difficult subject, I hope we can give good news to the whole of the Spanish."

The problem with an eviction moratorium is obvious. People will have no incentive to pay their mortgages for the next two years. This will bring further stress the Spanish banking sector and in turn to the Spanish government.
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