The Spanish Banking Association (AEB) considers that it would be “harmful” to undertake “deep reforms” in the Mortgage Law as a way of fighting evictions, since it could “break legal security” for creditors and would make credit more expensive and limit to access a home. In a letter sent to the banks, the president of the AEB, Miguel Martín, assures that “it would be very detrimental” to make “impressive” reforms in the regulations that regulate evictions, “inspired by conjunctural needs”, given that it could ” break the legal certainty, both for creditors and for investors».
“Specifically -says the letter- the market for mortgage bonds could be altered”, in which foreign investors represent a very relevant percentage and would also impact mortgage securitizations. It would also “significantly hinder access to housing, making financing more expensive and limiting credit.”
“97% cope”
Although he admits that “the current economic crisis is causing difficulties in paying their mortgage for a significant number of households”, Martín makes it clear that “almost 97% of Spanish families with a mortgage are meeting their payment obligations”, according to data of the Bank of Spain.
For this reason, for the AEB, “it is convenient to place the problem of foreclosures and evictions in its proper measure and clarify certain data and assertions that have been repeatedly mentioned.”
For the AEB, “it is very serious to put at risk the good payment culture that exists in our mortgage market”, which it judges “basic to ensure a solid and sustainable system and believes that” incentives should not be introduced to stop paying mortgages ” .
Regarding evictions, Martín highlights that in the last four years between 4,000 and 15,000 have been carried out in first homes, according to figures provided by the Undersecretary of Economy, Miguel Temboury, who also coordinates the working group on this matter.
Much worse are the data that emerge from the quarterly statistics prepared by the General Council of the Judiciary (CGPJ), which places 300,000 foreclosures initiated since 2007 and 57,410 launches agreed in the first half of 2012.
“Silent banking effort”
However, Martín recalls that these latest figures do not distinguish between evictions from first and second homes, nor in those applied to rented or owned housing, nor those that affect companies or individuals.
Finally, Martín defends the important “efforts” that banks are making “quietly” to renegotiate the mortgage payment of their clients with financial difficulties, with the aim of ensuring that “the monthly fee is adjusted to their ability to pay current”. According to Martín, «between 2009 and September 2012, private banks have restructured or refinanced 400,000 mortgages», offering their customers with payment problems alternatives such as extending repayment terms or reducing principal and interest».
After recalling initiatives such as the two-year moratorium on the evictions of the most vulnerable families agreed on Thursday by the Government, Martín recommends “analyzing the different proposals in a balanced way and with the greatest possible technical rigor” in the face of a “possible reform of the mortgage legislation.
For all this, the AEB believes that “indiscriminate criticism of the financial sector, accusing it of abusive and irregular practices and lack of social sensitivity, only contributes to generating disproportionate social alarm.”
“I think that Spanish banks are making a significant effort to try to mitigate the effects of a problem as sensitive as this one. Insisting on talking about abusive and irregular practices does not reflect reality, “concludes the president of the banking employers’ association.
