New Measures Needed to Tackle Mortgage Default Problems
July 13, 2012 3 Comments
Based on findings from a study on the impact of mortgage arrears, carried out by the Association of People Affected by Foreclosures and Auctions (AFES), the organisation has warned that 100,000 families are in danger of not paying their mortgage in the next two years due to rising unemployment.
The report reveals that 135,000 families are currently undergoing foreclosure proceedings, while 150,000 families have already lost their homes and a further 130,000 families are unable to pay their mortgage.
The AFES has warned that the “ever-widening gap” between banks and citizens “is strangling economic growth in Spain”. The organisation recognises that the banks are trying to adapt to the conditions of the debtor in order to avoid them getting into a default situation, “but the situation changes with families which are already in this process.”
According to El Economista, the president of the association, Carlos Baños, said that “undoubtedly the change of government will bring new measures in relation to mortgage arrears.” Baños went on to say that he hoped that the measures put in place to the fight against the struggling economy will open a debate over foreclosure proceedings, and that they will seek “alternative and negotiable” measures between the banks and their customers.
“We believe that the financial institutions are the ones who must take the lead in order to initiate a change of mindset, promoted by policy measures that build confidence in the system, and allowing them flexibility in mortgage default management”, stressed the AFES president.
The Association highlighted that the housing market recovery is one of the “major” challenges of the Government, “and will not be an easy task, because the outlook is complicated.”
Article source: Kyero.com