How to Prevent Foreclosures, the Spanish Way
Thursday, 14 July 2011

Evidently, the Americans (with 2+ million foreclosures), can learn much from the Spanish!

Luis Dominguez got up at dawn to take a 5 a.m. bus to join a human chain around a Madrid home threatened with foreclosure. Three weeks earlier, the crowd had come to him after he telephoned for help.

“I was facing eviction and they saved me from losing my home,” said Dominguez, 74, a pensioner with a walking stick in one hand and a five-foot placard saying “Stop Evictions” in the other. “I came today to show my gratitude and support.”

The 300 protesters, organized by a group called La Plataforma de los Afectados por la Hipoteca, or PAH, managed to win a reprieve for the property’s owner, a single mother with a disabled son. Rising unemployment in Spain may lead to 300,000 foreclosures this year and next, according to Adicae, a rights group representing bank customers.

Spain has become a battleground between banks hurt by a five-fold increase in residential mortgage arrears since 2007 and debt-laden homeowners who are appealing to the government to reduce the burden on those facing foreclosure.

“In large parts of the U.S., you can just walk away from your home and your debt, and that contributed to the country’s banking crisis,” Jordi Fabregat, a professor of management and financial control at Barcelona’s Esade Business School, said by telephone. “That can’t be done here, so the banks are protected from defaults during a crisis.”


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