Housing is the principal reason for the precarious situation of many Spanish families. So says Ada Colau, a prominent activist and now household name, following her remarks to the Spanish parliament and a senior member of the Spanish banking association during which she pointed blame directly at the bankers for the collapse of Spain’s debt-fueled housing bubble.
More than 1.4 million signatures have been collected for a legislative initiative that calls for a deep overhaul of mortgage regulations and an end to Spain’s severe approach to mortgage holders who fall behind on their payments.
The proposal would make it more difficult for banks to evict troubled borrowers behind on their payments and also prevent banks from demanding full payment of mortgages upon repossession. Public sentiment is that while individual home owners are forced to live with the consequences of the housing crisis, large companies are bailed out with public money.
The proposal is opposed by both the government and the Spanish banking sector and The Financial Times (FT), which has covered Ms. Colau’s involvement, reports that few believe it has any chance of passing through parliament in its current form. The debate continues, however, and politicians are beginning to feel the pressure.
In January, banking officials began sounding a more confident note about the state of the market. This confidence is reflected in Spain’s repayment of some of the emergency loans provided by the European Central Bank in 2012.
Others predict further challenges given the continuing economic deterioration in Spain. The FT reports that the Spanish economy is expected to contract by about 1.5% in 2013, the second consecutive year of recession with unemployment expected to rise. None of this is good news for Spain’s troubled housing market