3 June 2016 – El País
The number of foreclosures over primary residences is continuing its decline. The number of cases involving homes (secured by mortgages) being sold due to a failure to keep up with the mortgage repayments, decreased to 6,118 during the first three months of the year, which represents a 31.2% reduction compared with the same period in 2015, according to Spain’s National Institute of Statistics (INE). Taking the total number of family homes in Spain during the first quarter (18,408,300) as a benchmark, foreclosure proceedings were initiated on 0.03% of those properties during the quarter.
Whilst the crisis recedes, so too does one of its darkest sides. Two years ago, in 2014, 34,680 primary residences were handed over to the banks to settle unpaid debts. In 2015, that figure decreased for the first time by 13%. The decrease in interest rates to historical lows – they closed May in negative territory for the four month in a row and the monthly rate dropped to -0.013% – and agreements between borrowers and financial entities have helped to alleviate the drama.
Homes mortgaged in 2007 are the worst off
Borrowers who mortgaged their homes in 2007 and did so over second-hand homes have been hit the hardest. 20.4% of the foreclosures in Q1 corresponded to loans granted in that year. 15.6% related to mortgages signed in 2006 and 11.8% to loans taken out in 2008. The period comprising 2005-2008 accounted for 58.5% of all mortgage foreclosures and the highest values were reached in 2013 and 2007. During Q1, foreclosure proceedings were initiated against 0.20% and 0.19% of the mortgages granted over homes in each of those years, respectively, according to INE. 86.4% of the cases initiated during the three months to March related to second-hand homes, whilst 13.6% corresponded to new builds.
Homes owned by legal entities accounted for 17.7% of the total mortgage foreclosures. Beyond the housing market, the number of mortgage foreclosures registered over properties in general during the first quarter amounted to 19,354, which represents a 37.9% decrease with respect to the same period in 2015.
Andalucía, the most asphyxiated
The autonomous regions with the highest number of mortgage foreclosures over homes were Andalucía (3,144), Cataluña (2,113) and Valencia (2,094). And the fewest foreclosures were filed in Cantabria (43), La Rioja (54) and Navarra (61). Borrowers who took mortgages out between 2003 and 2015 in Murcia (0.25%), Andalucía (0.20%) and Valencia (0.18%) were the worst off. Meanwhile, those in the País Vasco (0.03%) and Cantabria (0.06%) suffered the least.
Original story: El Páis (by Sandra López Letón)
Translation: Carmel Drake