Spanish Banks Brace for Ultimate Showdown
A bitter, long-simmering conflict finally appears to be reaching its finale in Spain. On one side of the divide are the country’s biggest banks and some of the world’s largest investment funds; on the other are hundreds of thousands of families who lost their homes after the collapse of one of Europe’s biggest ever housing bubbles, together with the many thousands more who face the same fate today or tomorrow.
In Spain, more than in most places, debt stays with you until death do you part; it is never forgiven nor forgotten, and mortgages are “full recourse.” Even when a bank, often with the heavy-handed assistance of the forces of law and order, has repossessed someone’s home, that person could still be left on the hook for thousands, if not hundreds of thousands, of euros of debt.
Most Spanish foreclosure victims end up personally liable for not only much of the outstanding loan, but also thousands of euros in penalty interest charges and tens of thousands of euros in court fees. They can end up owing more than the original mortgage, but with no house to speak of, or live in.
So contentious is the issue of foreclosures in Spain that it sparked a nationwide resistance movement. When a local resident is threatened with eviction, word quickly spreads and groups of neighbors and social activists begin forming and offering their support. By the time police officers arrive there is an almost impenetrable wall of protesters between them and the front door of the property to be foreclosed.
The Rajoy government’s response to this popular movement was to include within its Orwellian-dubbed Citizen Security Law (A.k.a the Gag Law) a clause that made it illegal for people to try to prevent, through passive, non-violent resistance, the forced eviction of a local resident.
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