European court rules against Spanish eviction laws
Source: BBC
14 March 2013 Last updated at 16:25 GMT
Spanish laws are too tough on homeowners who default on their mortgages, the European Court of Justice has ruled.
The court found that Spanish legislation goes against EU law because it prevents judges declaring the terms of a loan agreement to be unfair.
Spanish rules make it hard for homeowners to contest an eviction by a bank.
Several recent suicides have been blamed on evictions.
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Read more: http://www.bbc.co.uk/news/world-europe-21789650
Ghost Dog
(16,881 posts)... The ruling comes in response to a question posed by a Barcelona court in connection with the eviction of Moroccan immigrant Mohammed Aziz from his home in January 2011, after he failed to meet mortgage payments on a 138,000-euro loan granted to him by savings bank CatalunyaCaixa in July 2007.
The court wanted to know if the eviction breached Azizs rights. The European Court ruled Thursday that the process of ousting him from his home infringed the European Unions 1993 Unfair Terms in Consumer Contracts (93/13EEC) directive on consumer protection.
The ruling will apply to all eviction cases now being processed across Europe but might not be applied retroactively, as pressure groups have been calling for. Amendments to the mortgage law, which is more than a century old, are now going through parliament, and it appeared as if the government was waiting for the Luxembourg-based courts judgment before proceeding with the passage of the draft law.
The courts decision will effectively allow judges to stop eviction procedures until a ruling is given on claims of abusive clauses in mortgage contracts. The ruling recognizes the right of consumers to have the existence of possible abusive clauses that may have been determining factors on mortgage defaults looked into before they lose their home, consumer protection group ADICAE said.
This is an historic ruling that will set a before and after in the relation of mortgage holders with their banks, said FACUA, another consumer lobby group.
There have been some 400,000 mortgage foreclosures in Spain since 2008, of which about half ended up in evictions...
/... http://elpais.com/elpais/2013/03/14/inenglish/1363264199_406548.html
BTW, a 138,000 home, at pre-crash prices, could probably be picked up for, say, 55,000 now. Or less. Easily.
It's not fair, is it.
dipsydoodle
(42,239 posts)this subject is part of the background to the nationalisation of 7 savings and loans banks in Spain and the subsequent need for them to be recapitalised to the tune of 31 billion due the scale of delinquent debt. Catalunya Caixa was one of those banks. As a general rule any mention here of the 31 million bailout is accompanied with cries of why are banks being bailed demonstrating a complete lack of knowledge of the situation in Spain.
No the situation is not fair but the root cause if this situation was the antics of US financial institutions 2007 which caused the collapse of the construction industry in Spain which was one of their largest employers.